TPTS 8-K
Terra Property Trust, Inc. (TPTS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices, including zip code)
(
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c)) |
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
| Item 1.01 | Entry into a Material Definitive Agreement. |
Exchange Offer
On June 30, 2026, Terra Property Trust, Inc., a Maryland corporation (the “Company”), completed the previously disclosed exchange offer for the Company’s 6.00% Senior Notes due June 30, 2026 (the “TPTA Notes”) that expired on June 26, 2026 (the “Exchange Offer”). Pursuant to the Exchange Offer, the Company offered to exchange all validly tendered TPTA Notes for a combination of (i) new 11.00% Senior Secured Notes due July 1, 2027 of the Company (the “Exchange Notes”) and (ii) cash.
The Exchange Offer expired at 5:00 p.m. New York City time, on June 26, 2026, and the final settlement of the Exchange Offer took place on June 30, 2026.
In connection with the Exchange Offer, the Company filed a registration statement on Form S-4 (File No. 333-295631) relating to the issuance of the Exchange Notes with the U.S. Securities and Exchange Commission (the “SEC”) on May 7, 2026 (as amended from time to time, the “Registration Statement”), which was declared effective by the SEC on June 26, 2026. The Exchange Offer was made pursuant to the terms and conditions set forth in the Registration Statement, which contains a more comprehensive description of the Exchange Offer.
Also, on June 30, 2026, the Company repaid the remaining outstanding principal balance of the TPTA Notes.
Indenture
As previously announced, $36,208,750 of the TPTA Notes were validly tendered and not withdrawn in the Exchange Offer. On June 30, 2026 (the “Issue Date”), the Company issued Exchange Notes with an aggregate principal balance of $27,156,250. The Exchange Notes were issued pursuant to an Indenture (the “Indenture”), dated June 30, 2026, by and between the Company and U.S. Bank Trust Company, National Association, in its capacity as trustee and collateral agent, a copy of which is filed as Exhibit 4.1 hereto, and is incorporated herein by reference.
The Exchange Notes are the senior secured obligations of the Company to the extent of the value of the Collateral (as defined below) securing the Exchange Notes (subject, as to the Shared Collateral (as defined below), to the terms of the Intercreditor Agreement (as defined in the Indenture)), pari passu in right of payment with the Existing Secured Notes (as defined in the Indenture) (subject to the terms of the Intercreditor Agreement) and all of the Company’s existing and future unsubordinated debt that is not expressly subordinated in right of payment to the Exchange Notes, senior in right of payment to any of the Company’s existing and future debt that is expressly subordinated in right of payment to the Exchange Notes, effectively senior to the Company’s existing and future debt that is unsecured or that is secured by a junior lien on the Collateral, in each case to the extent of the value of the Collateral securing the Exchange Notes (subject, as to the Shared Collateral, to the terms of the Intercreditor Agreement), effectively subordinated to all of the Company’s existing and future debt, guarantees and other liabilities (including trade payables) that are secured by liens on assets that do not constitute a part of the Collateral securing the Exchange Notes to the extent of the value of such assets securing such debt and other liabilities (including with respect to the Supplemental Liquidity Financing (as defined in the Indenture)), and structurally subordinated to all existing and future debt and other liabilities (including trade payables) of any existing and future subsidiaries of the Company. Subject to certain exceptions, the Exchange Notes are secured by a perfected security interest in the Collateral.
As of the Issue Date, the Exchange Notes were not guaranteed by any of the Company’s subsidiaries. Subject to certain exceptions, the Exchange Notes are secured by perfected liens granted by the Company on certain equity interests in the Company’s subsidiaries held by the Company from time to time, as more fully described in the Registration Statement. Subject to certain exceptions described in the Registration Statement, the Company has initially granted liens in the following (collectively with any liens on additional collateral that are granted by the Company from time to time, the “Collateral”): the equity interests the Company holds in (i) Terra East Dallas Industrial, LLC, (ii) Howell Lendco LLC, (iii) Maspen MS I LLC, (iv) Royaltree Lendco, LLC, (v) Terra 370 Lex, LLC, (vi) Terra Driggs, LLC, (vii) Terra Walnut Development, LLC, (viii) Vaspen MS I LLC, (ix) XS Maple LLC, (x) Terra Industrial LLC, (xi) MCM Maxx, LLC, (xii) Terra Mortgage Portfolio I, LLC, (xiii) Terra Income Fund 6, LLC, (xiv) Terra Mortgage Portfolio II, LLC, (xv) TPT Special Subsidiary, LLC, (xvi) University Park Lendco, LLC, (xvii) the newly-created special purpose entity which would be created as part of the Supplemental Liquidity Financing, which holds, directly or indirectly, the capital interests in Boundary Pref LLC, Peachtree Lendco LLC, Fund Financing, LLC, Mavik Revol One Holdings, LLC and New Walnut Member LLC and (xviii) Wonder Group, Inc., and any proceeds in respect of the foregoing (collectively, the “Shared Collateral”). Each of (i) Terra East Dallas Industrial, LLC and Dallas — 11333 Pagemill Owner, LLC, (ii) Howell Lendco LLC, (iii) Terra Mortgage Capital I, LLC and (iv) Terra Mortgage Portfolio II, LLC has initially granted liens on all or substantially all of its assets (collectively, the “Specific Exchange Notes Collateral” and, collectively with the Shared Collateral and any additional collateral a lien is granted on from time to time by the Company or any of its subsidiaries, the “Collateral”). However, the Indenture permits the Company to release the liens on any of the Shared Collateral securing the Exchange Notes (i) in whole, upon a satisfaction and discharge of the indenture, a legal defeasance or a covenant defeasance of the Exchange Notes, (ii) in whole or in part, with the consent of the requisite holders in accordance with the relevant provisions of the Indenture, including consents obtained in connection with a tender offer or exchange offer for, or purchase of, Exchange Notes, (iii) as provided in the Intercreditor Agreement, solely as to the Shared Collateral, and (iv) upon a sale or other disposition of the Specific Exchange Notes Collateral and the application of the Net Cash Proceeds (as defined in the Indenture) of such sale or other disposition in accordance with the terms of the Indenture.
The Company will pay interest on the Exchange Notes monthly, on the last day of each month, beginning July 31, 2026. Interest on the Exchange Notes will accrue from June 30, 2026, at a rate of 11.00% per annum. The Exchange Notes will mature on July 1, 2027, unless earlier redeemed or repurchased by the Company in accordance with their terms prior to such date.
The Company is required to redeem the Exchange Notes in whole or in part upon the consummation of certain asset sales, upon the receipt of certain extraordinary receipts, upon the Company’s incurrence of certain senior secured indebtedness, with certain Excess Cash Flow (as defined in the Indenture) amounts, and upon the receipt of proceeds from the repayment of certain assets that secure the Exchange Notes at a redemption price equal to 102% of the outstanding principal amount of the Exchange Notes to be redeemed plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption.
Prior to July 1, 2027, the Company may elect to redeem the Exchange Notes in whole or in part at any time, or from time to time, at a redemption price equal to 102% of the outstanding principal amount of the Exchange Notes to be redeemed plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption.
The Indenture contains certain covenants that, among other things, limit the Company’s ability to: (i) incur certain additional indebtedness; (ii) pay Dividends (as defined in the Indenture) (other than for purposes of maintaining REIT tax status), repurchase Capital Interests (as defined in the Indenture) or pay operating expenses in excess of an agreed upon budget; and (iii) merge or consolidate with another person.
The Indenture does not require the Company to offer to purchase the Exchange Notes in connection with a change of control or any other event.
The Indenture provides for certain events of default, including: (i) the Company’s failure to pay the principal (or premium, if any) of any Exchange Note when due; (ii) the Company’s failure to pay the interest on any Exchange Note when due and such default is not cured within 5 days; (iii) the Company remains in breach of any other covenant with respect to the Exchange Notes for 30 days after receiving a written notice of default stating the Company is in breach; (iv) the occurrence of any of the following: (a) except as permitted by the Indenture, any Security Document (as defined in the Indenture) or the Intercreditor Agreement ceases for any reason to be fully enforceable, in each case, on any material portion of the Collateral purported to be covered thereby; (b) except as permitted by the indenture governing the Exchange Notes, any lien purported to be granted under any Security Document on any material portion of the Collateral ceases to be a valid, enforceable and perfected lien with the priority required by the Security Documents; or (c) the Company, or any person acting on its behalf, denies or disaffirms, in any pleading in any court of competent jurisdiction, any material obligation of the Company’s set forth in or arising under any Security Document; (v) the Company file for bankruptcy or certain other events of bankruptcy, insolvency or reorganization; and (vi) in the case of certain orders or decrees entered against the Company under any bankruptcy law, such order or decree remains undischarged or unstayed for a period of 60 days. The events of default are subject to important exceptions and qualifications, as set forth in the Indenture.
Term Loan
On June 29, 2026, Subsidiary Holdings II, LLC (“Subsidiary Holdings”), a Delaware limited liability company and a wholly-owned subsidiary of the Company, entered into a term loan agreement (the “Term Loan Agreement”) with Strategic Yieldco LLC, a Delaware limited liability company, as lender (“Strategic Yieldco”), pursuant to which Strategic Yieldco provided an initial term commitment in an aggregate amount of up to $25 million and Subsidiary Holdings borrowed a term loan in an aggregate amount of $25 million (the “Term Loan”). The proceeds of the Term Loan were distributed by Subsidiary Holdings to the Company as partial funding to repay the TPTA Notes and to pay the cash portion of the Exchange Offer.
Pursuant to the Term Loan Agreement, the Company has guaranteed, on an unsecured and limited recourse basis, certain obligations under such Term Loan Agreement. The Term Loan bears interest at a rate equal to eleven percent (11.00%) per annum, payable in cash in arrears on the last business day of each calendar quarter. In addition, Subsidiary Holdings paid a non-refundable upfront fee equal to four percent (4.00%) of the amount of the Term Loan to Strategic Yieldco.
The Term Loan will mature and become payable on December 29, 2027. The Term Loan is secured by equity interests held by (i) Subsidiary Holdings I, LLC in Subsidiary Holdings, and (ii) Subsidiary Holdings in Fund Financing, LLC, Peachtree Lendco LLC, Boundary Pref LLC, Mavik Revol One Holdings LLC, and New Walnut Member LLC. The Term Loan would also be mandatorily payable, with certain exceptions, to the extent Subsidiary Holdings, or any of its subsidiaries, receives net proceeds in respect of the funds and portfolio investments held by the entities identified in the preceding sentence from (i) any sale, disposition or transfer of any interest, direct or indirect, therein and (ii) dividends and other distributions.
The Term Loan Agreement contains customary covenants with respect to Subsidiary Holdings, which are subject to a number of limitations and exceptions as provided therein, and contains customary events of default, bankruptcy and insolvency, and remedies provisions.
The above description of the Indenture, the Exchange Notes and Term Loan Agreement contained in this Item 1.01 is a summary only and is qualified in its entirety by reference to the Indenture, the Form of Exchange Notes included therein, and the Term Loan Agreement, which are attached hereto as Exhibits 4.1, 4.2, and 10.1, respectively, and are incorporated herein by reference.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TERRA PROPERTY TRUST, INC. | ||
| Date: July 2, 2026 | By: | /s/ Gregory Pinkus |
| Name: | Gregory Pinkus | |
| Title: | Chief Financial Officer | |
Exhibit 4.1
INDENTURE
Dated as of June 30, 2026
among
Terra Property Trust, Inc., as Issuer,
and
U.S. Bank Trust Company, National Association,
as Trustee and as Collateral Agent
11.00% SENIOR SECURED NOTES DUE 2027
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture*
| Trust Indenture Act Section | Indenture Section | ||
| 310 (a)(1) | 7.10 | ||
| (a)(2) | 7.10 | ||
| (a)(3) | N.A. | ||
| (a)(4) | N.A. | ||
| (a)(5) | 7.10 | ||
| (b) | 7.03, 7.10 | ||
| 311(a) | 7.10 | ||
| (b) | 7.10 | ||
| 312(a) | 2.05 | ||
| (b) | 12.03 | ||
| (c) | 12.03 | ||
| 313(a) | 7.06 | ||
| (b)(1) | 7.06;13.09 | ||
| (b)(2) | 7.06 | ||
| (c) | 7.06;12.02 | ||
| (d) | 7.06 | ||
| 314(a) | 4.03;13.09 | ||
| (c)(1) | 12.04 | ||
| (c)(2) | 12.04 | ||
| (c)(3) | N.A. | ||
| (d) | 13.09 | ||
| (e) | 12.05 | ||
| (f) | N.A. | ||
| 315(a) | 7.01 | ||
| (b) | 7.05, 12.02 | ||
| (c) | 7.01 | ||
| (d) | 7.01 | ||
| (e) | 6.13 | ||
| 316(a)(last sentence) | 2.09 | ||
| (a)(1)(A) | 6.05 | ||
| (a)(1)(B) | 6.02, 6.04 | ||
| (a)(2) | N.A. | ||
| (b) | 6.14 | ||
| (c) | 1.05(e) | ||
| 317(a)(1) | 6.07 | ||
| (a)(2) | 6.11 | ||
| (b) | 2.04 | ||
| 318(a) | 1.03, 12.01 | ||
| (b) | N.A. | ||
| (c) | 1.03, 12.01 | ||
N.A. means not applicable.
* This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.
Table of contents
Page
| ARTICLE I | ||
| DEFINITIONS AND INCORPORATION BY REFERENCE | ||
| SECTION 1.01. | Definitions | 1 |
| SECTION 1.02. | Other Definitions | 22 |
| SECTION 1.03. | Conflicts with Trust Indenture Act | 22 |
| SECTION 1.04. | Rules of Construction | 22 |
| SECTION 1.05. | Acts of Holders | 23 |
| ARTICLE II | ||
| THE NOTES | ||
| SECTION 2.01. | Form and Dating; Terms | 24 |
| SECTION 2.02. | Execution and Authentication | 25 |
| SECTION 2.03. | Registrar, Transfer Agent and Paying Agent | 25 |
| SECTION 2.04. | Paying Agent Provisions | 26 |
| SECTION 2.05. | Holder Lists | 26 |
| SECTION 2.06. | Transfer and Exchange | 26 |
| SECTION 2.07. | Replacement Notes | 31 |
| SECTION 2.08. | Outstanding Notes | 31 |
| SECTION 2.09. | Treasury Notes | 31 |
| SECTION 2.10. | Temporary Notes | 31 |
| SECTION 2.11. | Cancellation | 32 |
| SECTION 2.12. | Defaulted Interest | 32 |
| SECTION 2.13. | CUSIP and/or ISIN Numbers | 32 |
| SECTION 2.14. | Conditions Precedent to Issuance | 33 |
| ARTICLE III | ||
| REDEMPTION | ||
| SECTION 3.01. | Notices to Trustee | 33 |
| SECTION 3.02. | Selection of Notes to Be Redeemed | 33 |
| SECTION 3.03. | Notice of Redemption | 33 |
| SECTION 3.04. | Effect of Notice of Redemption | 34 |
| SECTION 3.05. | Deposit of Redemption Price | 35 |
| SECTION 3.06. | Notes Redeemed in Part | 35 |
| SECTION 3.07. | Optional Redemption | 35 |
| SECTION 3.08. | Mandatory Redemption | 36 |
-i-
Page
| ARTICLE IV | ||
| COVENANTS | ||
| SECTION 4.01. | Payment of Notes | 38 |
| SECTION 4.02. | Maintenance of Office or Agency | 38 |
| SECTION 4.03. | Reports by the Issuer | 39 |
| SECTION 4.04. | [Reserved] | 39 |
| SECTION 4.05. | Issuer Existence | 39 |
| SECTION 4.06. | Limitation on Dividends and Repurchases of Capital Interests | 39 |
| SECTION 4.07. | Limitation on Debt | 39 |
| SECTION 4.08. | Limitation on Payment of Operating Expenses | 41 |
| SECTION 4.09. | Payment of Transaction Fees and Expenses | 41 |
| SECTION 4.10. | Grant of Liens by Subsidiaries and Affiliates | 41 |
| ARTICLE V | ||
| SUCCESSORS | ||
| SECTION 5.01. | Merger, Consolidation or Sale of All or Substantially All Assets | 42 |
| SECTION 5.02. | Successor Person Substituted | 42 |
| ARTICLE VI | ||
| DEFAULTS AND REMEDIES | ||
| SECTION 6.01. | Events of Default | 42 |
| SECTION 6.02. | Acceleration | 44 |
| SECTION 6.03. | Other Remedies | 44 |
| SECTION 6.04. | Waiver of Past Defaults | 44 |
| SECTION 6.05. | Control by Majority | 44 |
| SECTION 6.06. | Limitation on Suits | 45 |
| SECTION 6.07. | Collection Suit by Trustee | 45 |
| SECTION 6.08. | Restoration of Rights and Remedies | 45 |
| SECTION 6.09. | Rights and Remedies Cumulative | 45 |
| SECTION 6.10. | Delay or Omission Not Waiver | 45 |
| SECTION 6.11. | Trustee May File Proofs of Claim | 46 |
| SECTION 6.12. | Priorities | 46 |
| SECTION 6.13. | Undertaking for Costs | 47 |
| SECTION 6.14. | Rights of Holders to Receive Payment | 47 |
| ARTICLE VII | ||
| TRUSTEE | ||
| SECTION 7.01. | Duties of Trustee | 47 |
| SECTION 7.02. | Rights of Trustee | 48 |
| SECTION 7.03. | Individual Rights of Trustee | 50 |
| SECTION 7.04. | Trustee’s Disclaimer | 50 |
| SECTION 7.05. | Notice of Defaults | 51 |
| SECTION 7.06. | Trustee Reports | 51 |
| SECTION 7.07. | Compensation and Indemnity | 51 |
| SECTION 7.08. | Replacement of Trustee | 52 |
| SECTION 7.09. | Successor Trustee by Merger, etc. | 53 |
| SECTION 7.10. | Eligibility; Disqualification | 53 |
| SECTION 7.11. | Intercreditor Agreement and Security Documents | 53 |
-ii-
Page
| ARTICLE VIII | ||
| LEGAL DEFEASANCE AND COVENANT DEFEASANCE | ||
| SECTION 8.01. | Option to Effect Legal Defeasance or Covenant Defeasance | 54 |
| SECTION 8.02. | Legal Defeasance and Discharge | 54 |
| SECTION 8.03. | Covenant Defeasance | 55 |
| SECTION 8.04. | Conditions to Legal or Covenant Defeasance | 55 |
| SECTION 8.05. | Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions | 56 |
| SECTION 8.06. | Repayment to Issuer | 56 |
| SECTION 8.07. | Reinstatement | 56 |
| ARTICLE IX | ||
| AMENDMENT, SUPPLEMENT AND WAIVER | ||
| SECTION 9.01. | Without Consent of Holders | 57 |
| SECTION 9.02. | With Consent of Holders | 58 |
| SECTION 9.03. | Compliance with Trust Indenture Act | 60 |
| SECTION 9.04. | Revocation and Effect of Consents | 60 |
| SECTION 9.05. | Notation on or Exchange of Notes | 60 |
| SECTION 9.06. | Trustee and the Collateral Agent to Sign Amendments, etc. | 60 |
| ARTICLE X | ||
| GUARANTEES | ||
| SECTION 10.01. | Guarantee | 61 |
| SECTION 10.02. | Limitation on Guarantor Liability | 62 |
| SECTION 10.03. | Execution and Delivery | 62 |
| SECTION 10.04. | Subrogation | 63 |
| SECTION 10.05. | Benefits Acknowledged | 63 |
| SECTION 10.06. | Release of Guarantees | 63 |
| ARTICLE XI | ||
| SATISFACTION AND DISCHARGE | ||
| SECTION 11.01. | Satisfaction and Discharge | 64 |
| SECTION 11.02. | Application of Trust Money | 64 |
| ARTICLE XII | ||
| MISCELLANEOUS | ||
| SECTION 12.01. | Trust Indenture Act Controls | 65 |
| SECTION 12.02. | Notices | 65 |
| SECTION 12.03. | Communication by Holders with Other Holders | 66 |
| SECTION 12.04. | Certificate and Opinion as to Conditions Precedent | 66 |
| SECTION 12.05. | Statements Required in Certificate or Opinion | 66 |
-iii-
Page
| SECTION 12.06. | Rules by Trustee and Agents | 67 |
| SECTION 12.07. | No Personal Liability of Directors, Officers, Employees and Stockholders | 67 |
| SECTION 12.08. | Governing Law | 67 |
| SECTION 12.09. | Waiver of Jury Trial | 67 |
| SECTION 12.10. | Force Majeure | 67 |
| SECTION 12.11. | No Adverse Interpretation of Other Agreements | 67 |
| SECTION 12.12. | Successors | 67 |
| SECTION 12.13. | Severability | 67 |
| SECTION 12.14. | Counterpart Originals | 68 |
| SECTION 12.15. | Table of Contents, Headings, etc. | 68 |
| SECTION 12.16. | USA PATRIOT Act | 68 |
| ARTICLE XIII | ||
| COLLATERAL | ||
| SECTION 13.01. | The Collateral | 68 |
| SECTION 13.02. | Further Assurances | 69 |
| SECTION 13.03. | Release of Collateral | 69 |
| SECTION 13.04. | Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Security Documents | 70 |
| SECTION 13.05. | Appointment and Authorization of U.S. Bank Trust Company, National Association as Collateral Agent | 71 |
| SECTION 13.06. | Collateral Accounts | 72 |
| SECTION 13.07. | Resignation of Collateral Agent | 73 |
| SECTION 13.08. | [Reserved] | 73 |
| SECTION 13.09. | Recordings | 73 |
EXHIBITS
| Exhibit A | Form of Note |
| Exhibit B | Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors |
| Exhibit C | Form of Intercreditor Agreement |
-iv-
INDENTURE, dated as of June 30, 2026, among Terra Property Trust, Inc., a Maryland corporation, and U.S. Bank Trust Company, National Association, as Trustee and as Collateral Agent.
W I T N E S S E T H
WHEREAS, the Issuer (as defined herein) has duly authorized the issuance of $27,156,250 aggregate principal amount of 11.00% Senior Secured Notes due 2027 (the “Notes”);
WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture (as defined herein); and
WHEREAS, this Indenture is subject to the provisions of the Trust Indenture Act that are deemed to be incorporated into this Indenture and shall, to the extent applicable, be governed by such provisions.
NOW, THEREFORE, each party hereto agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein).
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
“Additional Collateral” means additional property or assets of the Issuer or any of its subsidiaries a security interest in which is granted from time to time to the Collateral Agent for the benefit of the Notes Secured Parties to secure the Notes; provided that the Issuer shall identify Additional Collateral as either Shared Collateral or Specific Exchange Notes Collateral.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
“Agent” means any Registrar, co-registrar, Transfer Agent, co-transfer agent or Paying Agent or additional paying agent.
“Applicable Assets” has the meaning specified in the definition of Repurchase Agreement.
“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear or Clearstream.
“Asset Financing Facility” means any indebtedness or obligations under securitization transactions, repurchase facilities, warehouse facilities, note-on-note financings, other credit facilities and arrangements similar to any of the foregoing and any other indebtedness or obligations, in each case, secured directly or indirectly by, and incurred for the primary purpose of directly or indirectly funding the origination or acquisition of, or any investment in, or otherwise financing, refinancing or capitalizing any previous origination or acquisition of, or investment in, any RE Finance Assets and any Non-RE Finance Assets.
“Asset Sale” means any sale, transfer or other disposition (each, a “disposition”), including by way of merger or consolidation, in one transaction or a series of related transactions by the Issuer or any of its subsidiaries to any Person other than the Issuer or any of its subsidiaries of any assets or properties consisting of:
(1) all or any of the Capital Interests of any subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Issuer or a subsidiary);
(2) all or substantially all of the property or assets of an operating unit or line of business of the Issuer or any of its subsidiaries; or
(3) any other property and assets of the Issuer or any of its subsidiaries,
in each case, other than:
(a) any disposition of cash or Cash Equivalents or obsolete, damaged, surplus or worn out property in the ordinary course of business or any disposition of inventory or goods (or other assets) no longer used in the ordinary course of business (including dispositions consisting of abandonment of intellectual property rights that, in the good faith judgment of the Issuer, are not material to the conduct of the business of the Issuer and its subsidiaries, taken as a whole);
(b) the disposition of all or substantially all of the assets of the Issuer or any Guarantor, taken as a whole, in a manner permitted pursuant to the provisions described under Section 5.01 of this Indenture; provided that the successor entity shall have assumed all Obligations of the Issuer or such Guarantor, as applicable, under this Indenture, the Notes, the Guarantees and the Security Documents (including by executing a supplemental indenture, a joinder to the Security Documents or new Security Documents, as applicable, pursuant to which such successor entity pledges its assets as Collateral to the extent required by this Indenture and the Security Documents);
(c) the making of any Dividend that is permitted to be made, and is made, under Section 4.06 of this Indenture or any payment or other transaction excluded from such definitions or their component definitions;
(d) any disposition of assets or issuance or sale of Capital Interests in any subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than $2.0 million in any fiscal year;
(e) any disposition (including by liquidation, merger, consolidation or arrangement) of property or assets or issuance or sale of securities by a subsidiary of the Issuer to the Issuer or by the Issuer or a subsidiary of the Issuer to another subsidiary of the Issuer;
(f) to the extent allowable under Section 1031 of the Internal Revenue Code or any comparable or successor provision, any exchange of like property (excluding any boot thereon) for use in the ordinary course of the Issuer’s business;
(g) the lease, license, assignment or sublease of any real or personal property in the ordinary course of business;
-2-
(h) any termination of leases, subleases, licenses, sublicenses or cross-licenses (including of intellectual property or technology and any sale of improvements made to leased real property resulting from such sale), the termination of which is (i) made in the ordinary course of business, (ii) does not materially interfere with the business of the Issuer and its subsidiaries, taken as a whole, or (iii) related to facilities that are temporarily not in use, held for sale or closed, or the discontinuation of any product line or line of business;
(i) trade-ins or exchanges of equipment or other fixed assets in the ordinary course of business;
(j) foreclosures, condemnation or any similar action on assets (or exercise of termination rights under any lease, license, assignment or sublease of any real or personal property) or the granting of Liens not prohibited by the Indenture;
(k) (x) the sale, discount or other disposition of inventory, accounts receivable or notes receivable in the ordinary course of business, or in connection with the collection or compromise thereof, or the conversion of accounts receivable to notes receivable or securities, (y) the sale or other disposition of investments or other assets, in each case, in connection with the workout, compromise, settlement or collection thereof or exercise of remedies with respect thereto, in the ordinary course of business or in bankruptcy, foreclosure or similar proceedings, including foreclosure, repossession and disposition of REO Assets and other collateral for loans serviced and/or originated by the Issuer or any of its subsidiaries, and (z) the sale or other disposition of REO Assets owned as of the Issue Date);
(l) any financing transaction with respect to property built or acquired by the Issuer or any subsidiary after the Issue Date not prohibited by this Indenture;
(m) any sale or lease of services or licensing of intellectual property in the ordinary course of business;
(n) any lapse or abandonment of intellectual property rights which in the reasonable good faith determination of the Issuer are not material to the conduct of the business of the Issuer and its subsidiaries taken as a whole or are no longer used or useful or economically practicable or commercially reasonable to maintain;
(o) dispositions of investments in joint ventures to the extent required by, or made pursuant to buy/sell arrangements between the joint venture parties set forth in, joint venture arrangements and similar binding arrangements;
(p) any issuance, sale or other disposition of Capital Interests in a subsidiary to any Person (or an Affiliate thereof) for which a subsidiary provides shared purchasing, billing, collection or similar services in the ordinary course of business;
(q) any disposition of assets to a governmental entity, authority or agency that continue in use by the Issuer or any subsidiary, so long as the Issuer or any subsidiary may obtain title to such assets upon reasonable notice by paying a nominal fee;
(r) settlements or terminations of Swap Contracts and hedging arrangements;
(s) dispositions of real property and related assets in the ordinary course of business in connection with relocation activities for directors, officers, members of management, employees or consultants of the Issuer or any subsidiary;
-3-
(t) dispositions that are necessary or advisable in order to comply with Regulatory Requirements;
(u) any disposition for Treasury Management Agreements and related activities in the ordinary course of business;
(v) issuances and sales of directors’ qualifying shares and other Capital Interests in subsidiaries issued to foreign governments, foreign individuals or other third parties to the extent required by applicable law;
(w) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(x) any Financing Disposition;
(y) any disposition of non-core assets acquired in connection with any acquisition of (or any merger, consolidation, amalgamation or other business combination with or into) any Person, business or assets permitted under this Indenture or any Investment permitted under this Indenture in a single transaction or series of related transactions;
(z) (I) the lease, assignment or sublease, license or sublicense of any real or personal property in the ordinary course of business or consistent with past practice or industry practice and (II) the exercise of termination rights with respect to any lease, sublease, license or sublicense or other agreement; and
(aa) on or prior to the payment in full of the Supplemental Liquidity Financing, any of the Supplemental Liquidity Collateral.
“Average Life” means, as of any date of determination, with respect to any Debt, the quotient obtained by dividing (i) the sum of the products of (x) the number of years from the date of determination to the dates of each successive scheduled principal payment (including any sinking fund or mandatory redemption payment requirements) of such Debt multiplied by (y) the amount of such principal payment by (ii) the sum of all such principal payments.
“Bankruptcy Law” means Title 11, U.S. Code, as amended, or any similar federal or state law for the relief of debtors.
“Board of Directors” means the board of directors of the Issuer.
“Book-Entry Interest” means a beneficial interest in a Global Note held by or through a Participant.
“Budgeted Operating Expenses” has the meaning specified in Section 4.08 of this Indenture.
“Business Day” means each day which is not a Legal Holiday.
“Capital Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Lease Obligations) by the Issuer and its subsidiaries during such period that, in conformity with GAAP, are or are required to be included as capital expenditures on the consolidated statement of cash flows of the Issuer and its subsidiaries.
-4-
“Capital Interests” means, as to any Person, any and all shares, interests (including Preferred Interests), participations or other equivalents in the equity interest (however designated) of such Person and any rights (other than debt securities convertible into an equity interest), warrants or options to acquire an equity interest in such Person.
“Capital Lease Obligations” means any obligation under a lease that as of December 1, 2018 would have been required to have been capitalized for financial reporting purposes in accordance with GAAP; and the amount of Debt represented by such obligation shall be the capitalized amount of such obligations determined in accordance with GAAP as of such date; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. For purposes of this definition, “GAAP” refers to GAAP applicable to public companies as of December 1, 2018.
“Cash Equivalents” means any of the following investments: (i) securities issued or directly and fully guaranteed or insured by the United States, Canada or a member state of the European Union or any agency or instrumentality thereof (provided that the full faith and credit of the United States, Canada or such member state is pledged in support thereof) maturing not more than one year after the date of acquisition; (ii) time deposits in and certificates of deposit of any Eligible Bank (or in any other financial institution to the extent the amount of such deposit is within the limits insured by the Federal Deposit Insurance Corporation), provided that such investments have a maturity date not more than two years after the date of acquisition and that the Average Life of all such investments is one year or less from the respective dates of acquisition; (iii) repurchase obligations with a term of not more than 180 days for underlying securities of the types described in clause (i) above or clause (iv) below entered into with any Eligible Bank or securities dealers of recognized national standing; (iv) direct obligations issued by any state, province or territory of the United States or Canada or any political subdivision or public instrumentality thereof, provided that such investments mature, or are subject to tender at the option of the holder thereof, within 365 days after the date of acquisition and, at the time of acquisition, have a rating of at least A from S&P or A-2 or P-2 (or long term ratings of at least A3 or A-) from either S&P or Moody’s, or with respect to municipal bonds, a rating of at least MIG 2 or VMIG 2 from Moody’s (or equivalent ratings by any other nationally recognized rating agency); (v) commercial paper of any Person other than an affiliate of the Issuer and other than structured investment vehicles, provided that such investments have a rating permissible under clause (iv) above and mature within 270 days after the date of acquisition; (vi) overnight and demand deposits in and bankers’ acceptances of any Eligible Bank; (vii) demand deposits in any bank or trust company to the extent insured by the Federal Deposit Insurance Corporation; (viii) in the case of a Subsidiary that conducts business outside of the United States, demand deposits and time deposits that (a) are denominated in the currency of a country that is a member of the Organisation for Economic Co-operation and Development (“OECD”) or the currency of the country in which such Subsidiary is organized or conducts business and (b) are consistent with the Issuer’s investment policy as in effect from time to time, provided that, in the case of time deposits, such investments have a maturity date not more than two years after the date of acquisition and that the Average Life of all such time deposits is one year or less from the respective dates of acquisition; (ix) money market funds (and shares of investment companies that are registered under the Investment Advisers Act of 1940) substantially all of the assets of which comprise investments of the types described in clauses (i) through (vii); (x) United States dollars, or money in other currencies received in the ordinary course of business; (xi) asset-backed securities and corporate securities that are eligible for inclusion in money market funds; (xii) fixed maturity securities that are rated BBB- and above by S&P or Baa3 and above by Moody’s; provided that the aggregate amount of investments by any Person in fixed maturity securities that are rated BBB+, BBB or BBB- by S&P or Baa1, Baa2 or Baa3 by Moody’s shall not exceed 20% of the aggregate amount of investments in fixed maturity securities by such Person; and (xiii) instruments generally equivalent or similar to those referred to in clauses (i) through (vii) above or funds generally equivalent or similar to those referred to in clause (ix) above and comparable in credit quality and tenor to those referred to in such clauses and commonly used by corporations for cash management purposes in jurisdictions outside the United States to the extent advisable in connection with any business conducted by the Issuer or by any Subsidiary, all as determined in good faith by the Issuer.
-5-
“Clearstream” means Clearstream Banking, S.A., or its successor.
“Collateral” means all assets and properties, tangible or intangible, now existing or hereafter acquired that are subject or purported to be subject to a Lien in favor of the Collateral Agent to secure the Obligations under the Notes, the Guarantees, this Indenture and the Security Documents.
“Collateral Agent” means U.S. Bank Trust Company, National Association, in its capacity as “Collateral Agent” under this Indenture and the Security Documents and any successor or replacement thereto in such capacity.
“Collateral Coverage Ratio” means, as of any date of determination, the ratio of (a) Total Collateral Value as of such date to (b) the Covered Debt Amount on such date.
“Common Interests” of any Person means Capital Interests in such Person that do not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to Capital Interests of any other class in such Person.
“Consolidated” means the consolidation of accounts in accordance with GAAP
“Covered Debt Amount” means (without duplication) the sum of the aggregate outstanding principal amount of the Notes plus the aggregate outstanding principal amount of any other Series of Pari Passu Obligations.
“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give notice to the Holders and the Issuer.
“Credit Enhancement Agreements” means, collectively, any documents, instruments, guarantees or agreements entered into by the Issuer, any of its Subsidiaries or any Securitization Entity for the purpose of providing credit support (that is reasonable and customary for such Debt under then-prevailing market terms for such Debt) with respect to any Securitization Debt permitted (or not prohibited) by this Indenture.
“Debt” means, with respect to any Person on any date of determination (without duplication): (i) the principal of indebtedness of such Person for borrowed money; (ii) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (iii) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, in each case that have been drawn and not repaid within ten Business Days (but in each case excluding letters of credit and other instruments secured by cash or Cash Equivalents or issued in respect of trade payables); (iv) all Debt of other Persons secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person (but if such Debt is not an obligation of such Person, the amount of Debt hereunder shall in no event be in excess of the orderly liquidation value of such asset); (v) all Debt of others guaranteed by such Person, to the extent of the maximum liability under such guarantee; (vi) all payment obligations for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property), which purchase price is due more than one year after the date of placing such property in final service or taking final delivery and title thereto; (vii) all Capital Lease Obligations of such Person; and (viii) the redemption amount of such Person with respect to any Redeemable Capital Interest, valued at the amount of all obligations with respect to the redemption or repurchase thereof or the applicable liquidation preference.
-6-
Notwithstanding the foregoing, the term “Debt” will exclude: (a) prepaid or deferred revenue arising in the ordinary course of business; (b) any liability for federal, state, local or other taxes owed or owing to any government or other taxing authority; (c) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (d) contingent obligations incurred in the ordinary course of business or consistent with past practice; (e) obligations arising under or in connection with Treasury Management Agreements; (f) obligations arising out of the endorsement of negotiable instruments for collection in the ordinary course of business; (g) customary indemnification obligations; (h) post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment is otherwise contingent; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and finally determined, the amount is paid within 60 days thereafter; and (i) any earn-out obligation until such obligation becomes due and payable in accordance with its terms and has not been paid within ten (10) Business Days.
The amount of Debt of any Person at any date shall be determined as set forth above or as otherwise provided for in the Indenture, or otherwise shall equal the amount thereof that would appear as a liability on a balance sheet of such Person (excluding any notes thereto) prepared in accordance with GAAP.
“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A attached hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.
“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, DTC, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
“Direct Participant” means, with respect to the Depositary, a Person who has an account with the Depositary, Euroclear or Clearstream.
“Dividend” means any of the following:
| (1) | any dividend or other distribution declared and paid on the Capital Interests in the Issuer to any Person other than the Issuer or a Subsidiary of the Issuer, other than dividends or other distributions made solely in Qualified Capital Interests in the Issuer; and |
| (2) | any payment made by the Issuer or any of its Subsidiaries to purchase, redeem, defease or otherwise acquire or retire for value any Capital Interests in the Issuer (including the conversion into, or exchange for, Debt) other than (A) any such Capital Interests owned by the Issuer or any Subsidiary and (B) any payment made solely in Qualified Capital Interests in the Issuer. |
-7-
“Dollar” or “$” means the lawful money of the United States of America.
“DTC” means The Depository Trust Company.
“Eligible Bank” means a bank or trust company (i) that is organized and existing under the laws of the United States of America or Canada, or any state, territory, province or possession thereof or any member state of the European Union, (ii) that, as of the time of the making or acquisition of an Investment in such bank or trust company, has combined capital and surplus in excess of $1.0 billion and (iii) the senior Debt of which is rated at least “A-2” by Moody’s or at least “A” by S&P.
“Euroclear” means Euroclear Bank SA/NV, as operator of the Euroclear system (or any successor clearing agency).
“Excess Cash Flow” means, for any period:
| (a) | the sum of: |
| i. | Consolidated net income (or loss) of the Issuer and its subsidiaries for such period plus |
| ii. | the aggregate amount of all non-cash charges deducted in arriving at such Consolidated net income (or loss) less |
| (b) | the sum of: |
| i. | the aggregate amount of all non-cash credits included in arriving at such Consolidated net income (or loss) plus |
| ii. | the aggregate amount of Capital Expenditures of the Issuer and its subsidiaries paid in cash during such period plus |
| iii. | the aggregate amount of all regularly scheduled payments of Debt made during such period plus |
| iv. | the aggregate principal amount of all optional prepayments of Debt (other than Debt that is revolving in nature except to the extent such optional prepayments are accompanied by a reduction of commitments in respect of such Debt) made during such period plus |
| v. | the aggregate principal amount of all mandatory prepayments of the Notes or any other Pari Passu Obligations made during such period plus |
| vi. | the aggregate amount of any REIT Tax Dividends made by the Company plus |
| vii. | the aggregate amount of any Budgeted Operating Expenses paid by the Company and its subsidiaries. |
“Excess Proceeds Threshold” means, (i) with respect to any Asset Sales (other than any Specified Asset Sale) in any fiscal quarter, Net Cash Proceeds of all such Asset Sales received in such fiscal quarter in excess of $5.0 million in the aggregate for all such Asset Sales, (ii) with respect to any Extraordinary Receipts received in any fiscal quarter, the Net Cash Proceeds of all such Extraordinary Receipts received in such fiscal quarter in excess of $5.0 million in the aggregate for all such Extraordinary Receipts, and (iii) with respect to any Specified Asset Sales and any Specific Exchange Notes Collateral Repayments in any fiscal quarter, the Net Cash Proceeds of such Specified Asset Sales and such Specific Exchange Notes Collateral Repayments in excess of $3.0 million in any fiscal quarter, it being understood that the Excess Proceeds Threshold for this subclause (iii) shall not exceed in any case for any four fiscal quarter period an amount of $6.0 million in the aggregate for all such Specified Asset Sales and Specific Exchange Notes Collateral Repayments in any four fiscal quarter period.
-8-
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Existing Secured Notes” means the Issuer’s 7.00% Senior Secured Notes due 2029, issued pursuant to that certain Indenture, dated as of March 30, 2026, by and among the Issuer, as issuer and U.S. Bank Trust Company, National Association, in its capacity as trustee and collateral agent.
“Extraordinary Receipts” means any of the following to the extent received in cash or Cash Equivalents by the Issuer or any of its subsidiaries not in the ordinary course of business: (a) proceeds of insurance; (b) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action; (c) condemnation awards (and payments in lieu thereof); and (d) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not an Affiliate of the Issuer or any of its subsidiaries or (ii) received by the Issuer or any of its subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person); provided that cash and Cash Equivalent receipts described above shall not be included in “Extraordinary Receipts” to the extent that such proceeds are received in respect of any unaffiliated third party claim or loss and promptly applied to pay or reimburse another person for its prior payment of such claim or loss or related fees or expenses.
“Financial Officer” means the Chief Financial Officer, the Treasurer or other similar financial officer of the Issuer, as applicable.
“Financing Disposition” means any sale, transfer, conveyance or other disposition of (including pursuant to any intercompany securities lending arrangements), or creation or incurrence of any Lien on, Securitization Assets or Applicable Assets under a Repurchase Agreement by the Issuer or any Subsidiary thereof to or in favor of any Qualified Non-Recourse Subsidiary or by any Qualified Non-Recourse Subsidiary, in each case in connection with the incurrence by a Qualified Non-Recourse Subsidiary of any Asset Financing Facility, RE Financing, Securitization Debt or Qualified Non-Recourse Debt.
“Fitch” means Fitch Ratings, Inc. and any successor to its rating agency business.
“GAAP” means the accounting principles generally accepted in the United States of America.
“Global Note Legend” means the legend set forth in Section 2.06(g) hereof, which is required to be placed on all Global Notes issued under this Indenture.
“Global Notes” means, individually and collectively, a Global Note substantially in the form of Exhibit A attached hereto, bearing the Global Note Legend and having the “Schedule of Exchanges of Interests in the Global Note” attached thereto, deposited with the Notes Custodian and registered in the name of the Depositary or its nominee.
-9-
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state, local or otherwise, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business or consistent with industry practice), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Debt or other obligations.
“Guarantee” means the guarantee by any Guarantor of the Issuer’s Obligations under this Indenture and the Notes.
“Guarantor” means a Subsidiary of the Issuer, if any, that Guarantees the Notes in accordance with the terms of this Indenture.
“Hedging Obligations” of any Person means the obligations of such Person pursuant to any interest rate agreement, currency agreement or commodity agreement.
“Holder” means the Person in whose name a Note is registered on the Registrar’s books.
“Immediate Family Members” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, domestic partner, former domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships), any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals, such individual’s estate (or an executor or administrator acting on its behalf), heirs or legatees or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.
“Incur” means, with respect to any Debt or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Debt or other obligation. “Incurrence,” “Incurred,” and “Incurring” shall have meanings that correspond to the foregoing. A guarantee by the Issuer or a Subsidiary of Debt Incurred by the Issuer or a Subsidiary, as applicable, shall not be a separate Incurrence of Debt. For the avoidance of doubt, Debt of a Subsidiary that is assumed by the Issuer or a Subsidiary shall not be deemed to be a separate Incurrence of Debt.
“Indenture” means this Indenture, as amended, supplemented or otherwise modified from time to time.
“Indirect Participant” means securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly.
“Intercreditor Agreement” means that certain Pari Passu Intercreditor Agreement, to be dated as of the Issue Date, by and among the Issuer, in its capacity as a grantor thereunder, and U.S. Bank Trust Company, National Association, in its capacity as trustee and collateral agent for the Existing Secured Notes, as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, substantially in the form of Exhibit C attached hereto, including as modified via the joinder thereto dated as of the Issue Date.
-10-
“Interest Payment Date” means the last day of each calendar month to Stated Maturity, beginning July 31, 2026.
“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, credit card and debit card receivables, trade credit, advances to customers, commission, travel and similar advances to employees, directors, officers, members of management, manufacturers, consultants and independent contractors, in each case made in the ordinary course of business or consistent with industry practice), and purchases or other acquisitions for consideration of Debt, Capital Interests or other securities issued by any other Person.
“Issue Date” means June 30, 2026.
“Issuer” means Terra Property Trust, Inc. and its successors and/or assigns.
“Issuer’s Order” means a written request or order signed on behalf of the Issuer by an Officer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, and delivered to the Trustee.
“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.
“Legal Holiday” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or at the place of payment. If a payment date is on a Legal Holiday, payment will be made on the next succeeding day that is not a Legal Holiday and no interest shall accrue in the intervening period.
“Lien” means, with respect to any property or other asset, any mortgage, deed of trust, deed to secure Debt, pledge, hypothecation, security interest, lien (statutory or otherwise), charge, easement, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or other asset (including any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).
“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.
-11-
“Net Cash Proceeds” means, with respect to any issuance or incurrence of Debt, any Asset Sale, any Specific Exchange Notes Collateral Repayment or the receipt of any Extraordinary Receipts by the Issuer or any of its subsidiaries, the aggregate cash received (directly or indirectly) from time to time (whether as initial consideration or through payment or disposition of deferred consideration) by or on behalf of the Issuer or such subsidiary in connection therewith, after deducting therefrom only: (a) in the case of any Asset Sale, any Specific Exchange Notes Collateral Repayment or receipt of Extraordinary Receipts consisting of insurance proceeds or condemnation awards, the amount of any Debt secured by a Lien on the assets that are the subject thereof (other than Debt assumed by the purchaser) that is required to be, and is, repaid in connection therewith (excluding any voluntary prepayment), (b) reasonable, documented, out-of-pocket fees, commissions and expenses actually incurred by the Issuer or such subsidiary directly in connection with such transaction, and any legal and other fees incurred by the Issuer or such subsidiary prior to the date thereof, including any legal and other fees incurred in respect of the issuance of the Notes, (c) transfer taxes actually paid to any taxing authorities by the Issuer or such subsidiary in connection therewith, (d) net income taxes and tax distributions actually paid (or required to be paid within 180 days of the closing of such transaction) in connection therewith, and (e) amounts reserved pursuant to a written agreement entered into in connection with such transaction for liabilities or indemnification payments (fixed or contingent) directly attributable to such transaction, not to exceed 10% of the gross cash proceeds thereof; provided that (I) in each case (other than clauses (b), (c) and (d)), the amounts deducted are (x) actually paid or payable to a Person that is not an Affiliate of the Issuer or any of its subsidiaries and (y) properly attributable to such transaction or the asset that is the subject thereof, (II) any amounts reserved pursuant to clause (e) that are not applied to the applicable liabilities or indemnification obligations by the Stated Maturity (or, if earlier, the date on which such reserve is no longer required under the applicable written agreement) shall constitute Net Cash Proceeds as of the end of such period, and (III) the Issuer shall deliver to the Trustee an Officer's Certificate (upon which the Trustee may conclusively rely without inquiry, review or investigation) setting forth in reasonable detail the calculation of Net Cash Proceeds within ten (10) Business Days following the consummation of any transaction giving rise to Net Cash Proceeds. For the avoidance of doubt, in no event shall the Trustee be obligated to make any determinations or calculations or have any responsibility or obligation whatsoever with respect to any matters related to this definition of Net Cash Proceeds and the notices or copies of notices or Officer’s Certificate provided to the Trustee related thereto. The notices or copies of notices or Officer’s Certificate provided to the Trustee pursuant to this definition of Net Cash Proceeds are for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with this definition of Net Cash Proceeds or the calculation of Net Cash Proceeds (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates and/or notices or copies of notices without inquiry, review or investigation).
“Non-RE Finance Assets” means (i) any commercial loans, any business loans, any SBA loans, any accounts receivable and/or direct or indirect interests therein (including, without limitation, asset backed securities, collateralized loan obligations, senior and junior notes and participation interests with respect to any of the foregoing), (ii) any rights, assets or investments similar to or derivative of, any item referred to in the foregoing clause (i) and/or the origination, acquisition, financing, servicing or administration thereof (including servicing rights, and in each case regardless of whether or not the Issuer or any of its Subsidiaries owns or originated the applicable commercial loan, business loan, SBA loan, accounts receivable or direct or indirect interest therein) and (iii) Capital Interests in any Person substantially all of whose assets, directly or indirectly, are comprised of one or more of the items referred to in the foregoing clauses (i) and/or (ii).
“Non-Recourse Debt” means any Debt of the Issuer or any of its Subsidiaries, consisting of any of the following:
| (1) | Qualified Non-Recourse Debt; |
| (2) | Debt in respect of which recourse for payment is contractually limited to specific assets of the Issuer or any of its Subsidiaries whether or not encumbered by a Lien securing such Debt (other than recourse pursuant to Standard Recourse Undertakings); and |
-12-
| (3) | customary completion or budget guarantees provided to lenders or other financing sources in connection with any of the foregoing clauses (1) and (2) in the ordinary course of business; |
provided that (x) the foregoing shall not be considered Non-Recourse Debt to the extent and for so long as a claim for payment or performance has been made at which time the obligations shall not be considered Non-Recourse Debt to the extent, and only to the extent, that such claim is a liability (for GAAP purposes) of the Issuer or any of its Subsidiaries (other than a Qualified Non-Recourse Subsidiary), and (y) to the extent any of the foregoing Non-Recourse Debt is supported by a guarantee provided by the Issuer or any of its Subsidiaries (other than a Qualified Non-Recourse Subsidiary) which recourse is not contractually limited to specific assets, but limited in recourse as to an amount or percentage, then such guarantee shall not be considered Non-Recourse to the extent, and only to the extent, of such amount or percentage.
“Non-U.S. Person” means a Person who is not a U.S. Person.
“Notes Custodian” means the custodian with respect to the Global Notes (as appointed by the Depositary) or any successor Person thereto, and shall initially be the Trustee.
“Notes Obligations” means all obligations of the Issuer under the Indenture, the Notes, and the Security Documents.
“Notes Secured Parties” means the Trustee, the Collateral Agent and the holders from time to time of the Notes.
“Obligations” means any principal, interest, fees and expenses (including any such interest, fees and expenses accruing on or subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding, whether or not such interest, fees or expenses is an allowed or allowable claim under applicable state, federal or foreign law), premium, penalties, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Debt.
“Officer” means the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of any Person. Unless otherwise indicated, Officer shall refer to an Officer of the Issuer.
“Officer’s Certificate” means a certificate signed on behalf of a Person by an Officer of such Person that meets the requirements set forth in this Indenture.
“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee or the Collateral Agent, as applicable. The counsel may be an employee of or counsel to the Issuer or the Trustee or the Collateral Agent, as applicable.
“Pari Passu Obligations” means (i) all Notes Obligations, and (ii) any other obligations secured by a Lien on a pari passu basis with the Notes Obligations on the Shared Collateral and subject to the Intercreditor Agreement that are permitted to be incurred and secured by such Liens pursuant to the indenture.
-13-
“Person” means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Preferred Interests” as applied to the Capital Interests in any Person, means Capital Interests in such Person of any class or classes (however designated) that rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Common Interests in such Person.
“Qualified Capital Interests” in any Person means a class of Capital Interests other than Redeemable Capital Interests.
“Qualified Non-Recourse Debt” means Debt (including any such Debt incurred in connection with a Financing Disposition) that (i) is (x) incurred by a Qualified Non-Recourse Subsidiary to finance the acquisition, lease, construction, repair, replacement, improvement or continued ownership of any new or existing property (real or personal, whether through the direct purchase of property or the Capital Interests of any Person owning such property and whether in a single acquisition or a series of related acquisitions), any undeveloped land, any RE Finance Assets, any Non-RE Finance Assets or any Securitization Assets or (y) assumed by a Qualified Non-Recourse Subsidiary and (ii) is non-recourse to the Issuer or any Subsidiary (other than a Qualified Non-Recourse Subsidiary or its Subsidiaries), except as to any Standard Recourse Undertakings.
“Qualified Non-Recourse Subsidiary” means (i) a Subsidiary that is the owner of, or has been formed or created on or after the Settlement Date in order to finance the acquisition, lease, construction, repair, replacement, improvement or continued ownership of, any new or existing property or any undeveloped land, any RE Finance Assets or any Non-RE Finance Assets, (ii) any Securitization Entity, (iii) any Repo Seller and (iv) any Subsidiary of a Qualified Non-Recourse Subsidiary.
“Rating Agency” means (1) any of Moody’s, S&P and Fitch and (2) if Moody’s, S&P or Fitch ceases to rate the Notes for reasons outside of the Issuer’s control, a nationally recognized statistical rating organization selected by the Issuer as a replacement agency for Moody’s, S&P or Fitch, as the case may be.
“RE Finance Assets” means (i) any commercial or residential real estate loans and/or direct or indirect interests therein (including, without limitation, commercial or residential mortgage backed securities, collateralized loan obligations, mezzanine interests, senior and junior notes and participation interests with respect to any of the foregoing), (ii) any rights, assets or investments similar to or derivative of, any item referred to in the foregoing clause (i) and/or the origination, acquisition, financing, servicing or administration thereof (including mortgage servicing right and Servicing Advances, and in each case regardless of whether or not the Issuer or any of its Subsidiaries owns or originated the applicable commercial or residential real estate loan or direct or indirect interest therein) and (iii) Capital Interests in any Person substantially all of whose assets, directly or indirectly, are comprised of one or more of the items referred to in the foregoing clauses (i) and/or (ii). For the avoidance of doubt, no real estate investment shall constitute a RE Finance Asset.
“RE Financing” means any Debt or obligations principally secured directly or indirectly by, and incurred for the primary purpose of directly or indirectly funding the acquisition of, or any investment in, or otherwise financing, refinancing or capitalizing any previous acquisition of, or investment in, real estate investments and/or interests therein (including, for the avoidance of doubt, any mezzanine financing secured by Capital Interests in Subsidiaries that directly or indirectly own real estate investments).
-14-
“Record Date” for the interest payable on any applicable Interest Payment Date means the fifteenth (15th) calendar day (whether or not a Business Day) of each month immediately preceding such Interest Payment Date.
“Redeemable Capital Interests” in any Person means any equity security of such Person that by its terms (or by terms of any security into which it is convertible or for which it is exchangeable), or otherwise (including the passage of time or the happening of an event), is required to be redeemed (other than in exchange for Qualified Capital Interests), is redeemable at the option of the holder thereof in whole or in part (including by operation of a sinking fund) (other than in exchange for Qualified Capital Interests), or is convertible or exchangeable for Debt of such Person at the option of the holder thereof, in whole or in part, at any time prior to the Stated Maturity of the Notes; provided that only the portion of such equity security that is required to be redeemed, is so convertible or exchangeable or is so redeemable at the option of the holder thereof before such date will be deemed to be Redeemable Capital Interests. Notwithstanding the preceding sentence, any equity security that would constitute Redeemable Capital Interests solely because the holders of the equity security have the right to require the Issuer to repurchase such equity security upon the occurrence of a change of control, a fundamental change or an asset sale will not constitute Redeemable Capital Interests if the terms of such equity security provide that the Issuer may not repurchase or redeem any such equity security pursuant to such provisions unless such repurchase or redemption complies with Section 4.06 hereof. The amount of Redeemable Capital Interests deemed to be outstanding at any time for purposes of the Indenture will be the maximum amount that the Issuer and its Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Redeemable Capital Interests or portion thereof, exclusive of accrued dividends.
“Registration Statement” means the Form S-4 Registration Statement, dated June 22, 2026 relating to the sale of the Notes.
“Regulatory Requirements” means all applicable laws, rules, regulations, orders, requirements, guidelines, interpretations, directives and requests (whether or not having the force of law) from and of, and plans, memoranda and agreements with, any Regulatory Authority.
“REO Asset” of a Person means a real estate asset owned by such Person and acquired as a result of the foreclosure or other enforcement of a lien on such asset securing a Servicing Advance or loans or other mortgage-related receivables purchased or originated by the Issuer or any Subsidiary of the Issuer in the ordinary course of business.
“REIT” means a real estate investment trust.
“REIT Subsidiary” means a Subsidiary of the Issuer that is a REIT.
“REIT Tax Dividends” has the meaning specified in Section 4.06 of this Indenture.
“Repo Seller” has the meaning specified in the definition of Repurchase Agreement.
“Repurchase Agreement” means an agreement between the Issuer and/or any of its Subsidiaries, as seller (in any such case, the “Repo Seller”), and one or more banks, other financial institutions and/or other investors, lenders or other Persons, as buyer (in any such case, the “Repo Buyer”), and any other parties thereto, under which the Issuer and/or such Subsidiary or Subsidiaries, as the case may be, are permitted to finance the origination or acquisition of loans, Investments, Capital Interests, other securities, servicing rights and/or any other tangible or intangible property or assets and interests in any of the foregoing (collectively, “Applicable Assets”) by means of repurchase transactions pursuant to which the Repo Seller sells, on one or more occasions, Applicable Assets to the Repo Buyer with an obligation of the Repo Seller to repurchase such Applicable Assets on a date or dates and at a price or prices specified in or pursuant to such agreement, and which may also provide for payment by the Repo Seller of interest, fees, expenses, indemnification payments and other amounts, and any other similar agreement, instrument or arrangement, together with any and all existing and future documents related thereto (including, without limitation, any promissory notes, security agreements, intercreditor agreements, mortgages, other collateral documents and guarantees), in each case as the same may have been or may be amended, restated, amended and restated, supplemented, modified, renewed, extended, refunded, refinanced, restructured or replaced in any manner (whether before, upon or after termination or otherwise) in whole or in part from time to time (including successive amendments, restatements, amendments and restatements, supplements, modifications, renewals, extensions, refundings, refinancings, restructurings or replacements of any of the foregoing), and whether or not with the original or other sellers, buyers, guarantors, agents, lenders, banks, financial institutions, investors or other parties.
-15-
“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any director, vice president, assistant vice president, any trust officer or assistant trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
“S&P” means S&P Global Ratings, a division of S&P Global Inc., and any successor to its rating agency business.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Securitization Assets” means, collectively, servicing advances, mortgage loans, installment contracts, other loans and related assets, accounts receivable, real estate assets and mortgage receivables (including any participation interests with respect to any of the foregoing); provided that in no event shall any Shared Collateral or Specific Exchange Notes Collateral constitute Securitization Assets.
“Securitization Debt” means (a) Debt of the Issuer or any of its Subsidiaries incurred pursuant to on-balance sheet securitizations and (b) any Debt consisting of advances made to the Issuer or any of its Subsidiaries based upon securities issued by a Securitization Entity pursuant to a securitization and acquired or retained by the Issuer or such Subsidiary which, in each case, is recourse solely to the assets subject to the related securitization and not to the Issuer or such Subsidiary generally (other than Securitization Repurchase Obligations); provided that (i) no Securitization Debt shall be secured by, or have recourse (whether direct or indirect) to, any Shared Collateral or Specific Exchange Notes Collateral, and (ii) the Issuer shall deliver to the Trustee an Officer’s Certificate (upon which the Trustee may conclusively rely without inquiry, review or investigation) setting forth in reasonable detail the amount and terms of any Securitization Debt within ten (10) Business Days following the incurrence thereof. For the avoidance of doubt, in no event shall the Trustee be obligated to make any determinations or calculations or have any responsibility or obligation whatsoever with respect to the amount and terms of any Securitization Debt or any matters related to this definition of Securitization Debt and the notices or copies of notices or Officer’s Certificate provided to the Trustee related thereto. The notices or copies of notices or Officer’s Certificate provided to the Trustee pursuant to this definition of Securitization Debt are for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with this definition of Securitization Debt or the amount and terms of any Securitization Debt (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates and/or notices or copies of notices without inquiry, review or investigation).
-16-
“Securitization Entity” means (a) any Person established for the sole purpose of issuing asset-backed or mortgage-backed or mortgage pass-through securities of any kind (including collateralized mortgage obligations and net interest margin securities) or other similar securities; (b) any special purpose Subsidiary established for the sole purpose of selling, depositing or contributing Securitization Assets into a Person described in clause (a) or for the purpose of holding Capital Interests of, or securities issued by, any related Securitization Entity, regardless of whether such Person is an issuer of securities; provided that such Person is not an obligor with respect to any Debt of the Issuer or any Subsidiary; (c) any Person established for the sole purpose of holding Securitization Assets and issuing Debt secured by such Securitization Assets; provided that such Person is not an obligor with respect to any Debt of the Issuer or any Subsidiary (other than Debt secured solely by such Securitization Assets); or (d) any special purpose Subsidiary of the Issuer formed exclusively for the purpose of satisfying the requirement of Credit Enhancement Agreements (including, without limitation, any Subsidiary that is established for the purpose of owning another Securitization Entity and pledging the equity of that other Securitization Entity as security for the Debt of such other Securitization Entity) and regardless of whether such Subsidiary is an issuer of securities, provided that such Subsidiary is not an obligor with respect to any Debt of the Issuer or any Subsidiary other than under Credit Enhancement Agreements. The Issuer shall deliver to the Trustee an Officer's Certificate (upon which the Trustee may conclusively rely without inquiry, review or investigation) identifying any Person designated as a Securitization Entity and setting forth in reasonable detail the basis for such designation within ten (10) Business Days following such designation. For the avoidance of doubt, in no event shall the Trustee be obligated to make any determinations or calculations or have any responsibility or obligation whatsoever with respect to the basis for the designation of any Securitization Entity or any matters related to this definition of Securitization Entity and the notices or copies of notices or Officer’s Certificate provided to the Trustee related thereto. The notices or copies of notices or Officer’s Certificate provided to the Trustee pursuant to this definition of Securitization Entity are for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with this definition of Securitization Entity or the designation of any Securitization Entity (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates and/or notices or copies of notices without inquiry, review or investigation).
“Securitization Repurchase Obligation” means any obligation of a seller of Securitization Assets in a securitization to repurchase Securitization Assets arising solely as a result of a breach of a representation, warranty or covenant made by such seller in connection with such securitization, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, offset or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.
“Security Agreement” means the Security Agreement, dated as of the Issue Date, among the Issuer and the Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time, relating to the Liens granted in favor of the Collateral Agent for the benefit of the Notes Secured Parties on the Shared Collateral.
“Security Documents” means the Security Agreement, the Specific Exchange Notes Collateral Security Agreement, the Intercreditor Agreement, and each other security or collateral document pursuant to which the Issuer grants liens in favor of the Collateral Agent to secure the Notes Obligations.
“Senior Secured Notes” means any senior secured Debt consisting of bonds, debentures, notes or other similar Debt securities issued in (a) a public offering registered under the Securities Act or (b) a private placement exempt from registration under the Securities Act, but excluding, in any event, (i) any such Debt that constitutes an Asset Financing Facility, RE Financing, or Qualified Non-Recourse Debt, (ii) any Standard Recourse Undertakings in respect of the foregoing, (iii) any Debt under a credit agreement, any commercial bank or similar Debt, any recourse transfer of a financial asset or any other type of Debt incurred in a manner not customarily viewed as a “securities offering” or (iv) the Supplemental Liquidity Financing.
-17-
“Series” means (i) the Notes and (ii) each other issuance or incurrence of Debt that is secured on a pari passu basis by the Shared Collateral with the Notes pursuant to the Intercreditor Agreement.
“Settlement Date” means the date of settlement of the Notes pursuant to this Indenture.
“Servicing Advances” means advances made by the Issuer or any of its Subsidiaries in its capacity as servicer of any mortgage-related receivables to fund principal, interest, escrow, foreclosure, insurance, tax or other payments or advances when the borrower on the underlying receivable is delinquent in making payments on such receivable; to enforce remedies, manage and liquidate REO Assets; or that the Issuer or any of its Subsidiaries otherwise advances in its capacity as servicer.
“Shared Collateral” means, as of the Issue Date, the Capital Interests in (i) Terra East Dallas Industrial, LLC, (ii) Howell Lendco LLC, (iii) Maspen MS I LLC, (iv) Royaltree Lendco, LLC, (v) Terra 370 Lex, LLC, (vi) Terra Driggs, LLC, (vii) Terra Walnut Development, LLC, (viii) Vaspen MS I LLC, (ix) XS Maple LLC, (x) Terra Industrial LLC, (xi) MCM Maxx, LLC, (xii) Terra Mortgage Portfolio I, LLC, (xiii) Terra Income Fund 6, LLC, (xiv) Terra Mortgage Portfolio II, LLC, (xv) TPT Special Subsidiary, LLC, (xvi) University Park Lendco, LLC, (xvii) the newly-created special purpose entity which would be created as part of the Supplemental Liquidity Financing, which will hold directly or indirectly, the Capital Interests in Boundary Pref LLC, Peachtree Lendco LLC, Fund Financing, LLC, Mavik Revol One Holdings, LLC and New Walnut Member, LLC and (xviii) Wonder Group, Inc. held directly or indirectly by the Issuer, and any proceeds in respect of the foregoing.
“Specific Exchange Notes Collateral” means, as of the Issue Date, all or substantially all of the assets of each of (i) Terra East Dallas Industrial LLC and Dallas – 11333 Pagemill Owner, LLC (together holding an investment in an industrial property), (ii) Howell Lendco LLC (holding a first mortgage loan secured by an infill land property), (iii) Terra Mortgage Capital I, LLC (holding a mezzanine loan secured by an industrial property), and (iv) Terra Mortgage Portfolio II, LLC (holding a mezzanine loan secured by a commercial property), and any proceeds in respect of the foregoing and, after the Issue Date, any Additional Collateral identified as Specific Exchange Notes Collateral, and any proceeds in respect thereof. For the avoidance of doubt and notwithstanding anything to the contrary contained herein, (A) the Liens granted in favor of the Collateral Agent for the benefit of the Notes Secured Parties on the Specific Exchange Notes Collateral and any proceeds in respect thereof shall not be subject to release, subordination or termination without the prior written consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Notes then outstanding, and (B) no Debt (other than the Notes Obligations) shall be secured by any Lien on the Specific Exchange Notes Collateral or any proceeds in respect thereof.
“Specific Exchange Notes Collateral Repayment” means, in respect of any Specific Exchange Notes Collateral, the receipt by the Issuer or any of its subsidiaries of Net Cash Proceeds (without duplication of any Net Cash Proceeds received from the Asset Sale of such Specific Exchange Notes Collateral) in connection with the repayment, whether optional or mandatory, or refinancing thereof, in full or in part, and whether consisting of principal or interest thereof.
-18-
“Specific Exchange Notes Collateral Security Agreement” means the Specific Exchange Notes Collateral Security Agreement, to be dated as of the Issue Date, among the Issuer and its Subsidiaries owning the Specific Exchange Notes Collateral and the Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time, relating to the first-priority Liens granted in favor of the Collateral Agent for the benefit of the Notes Secured Parties on the Specific Exchange Notes Collateral.
“Specified Asset Sale” means any Asset Sale the subject assets or properties of which (i) constitute Specific Exchange Notes Collateral or (ii) constitute the senior loan on the properties located at 1709 Shattuck Avenue & 1710 Walnut Street, Berkeley, CA 94709, and currently held by University Park Lendco, LLC and any direct or indirect interest of the Issuer or any of its subsidiaries in such senior loan.
“Standard Recourse Undertakings” means, with respect to any Non-Recourse Debt, (a) such representations, warranties, covenants and indemnities which are customarily (as determined by the Issuer) made by sellers of financial assets or other Securitization Assets, including without limitation, Securitization Repurchase Obligations and other agreements and undertakings entered into or provided by the Issuer or any of its Subsidiaries that the Issuer determines in good faith (which determination shall be conclusive) are customary or otherwise necessary or advisable in connection with Non-Recourse Debt, and (b) such customary (as determined by the Issuer) carve-out matters for which the Issuer and/or its Subsidiaries acts as guarantor in connection with any such Non-Recourse Debt, including but not limited to gross negligence, intentional or willful misconduct, fraud, misappropriation or misapplication of funds, misrepresentation, criminal acts, repurchase obligations for breach of representations or warranties, environmental indemnities, insolvency events and non-approved transfers.
“Stated Maturity,” when used with respect to (i) any Note or any installment of interest thereon, means the date specified in such Note as the fixed date on which the principal amount of such Note or such installment of interest is due and payable and (ii) any other Debt or any installment of interest thereon, means the date specified in the instrument governing such Debt as the fixed date on which the principal of such Debt or such installment of interest is due and payable.
“Structurally Senior Debt” means Debt for borrowed money Incurred by the Issuer or any of its subsidiaries (other than Debt for borrowed money due the Issuer or any of its subsidiaries) that is structurally senior to the Notes or is secured by assets or property that do not also secure the Notes on a pari passu basis provided that the maturity date in respect of such Structurally Senior Debt shall be at least 91 days after the Stated Maturity of the Notes, but excluding, in any event, (i) any ordinary course working capital Debt in an aggregate amount Incurred after the Issue Date not to exceed $5.0 million, (ii) any such Debt that constitutes an Asset Financing Facility, RE Financing, or Qualified Non-Recourse Debt, in an aggregate amount Incurred after the Issue Date not to exceed $25.0 million, (iii) any Standard Recourse Undertakings in respect of the foregoing, or (iv) the Supplemental Liquidity Financing.
“Subordinated Debt” means all Debt of the Issuer and its Subsidiaries on a consolidated basis that is contractually subordinated in right of payment to the Notes.
“Subsidiary” means, with respect to any Person:
(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50.0% of the total voting power of shares of Capital Interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, members of management or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and
-19-
(2) any partnership, joint venture, limited liability company or similar entity of which:
(a) more than 50.0% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and
(b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Indenture shall refer to a Subsidiary or Subsidiaries of the Issuer.
“Supplemental Liquidity Collateral” means the Capital Interests held by (i) Subsidiary Holdings I, LLC in Subsidiary Holdings II, LLC, and (ii) Subsidiary Holdings II, LLC in Fund Financing, LLC, Peachtree Lendco LLC, Boundary Pref LLC, Mavik Revol One Holdings LLC, and New Walnut Member LLC, and certain of the assets held by such entities. For the avoidance of doubt, the Supplemental Liquidity Collateral shall not include, subordinate, limit, or impair any of the Specific Exchange Notes Collateral.
“Supplemental Liquidity Financing” means, if any, the term loan agreement, entered into on or prior to the Issue Date by Subsidiary Holdings II, LLC, as borrower, with a third-party lender and a third-party administrative agent and collateral agent, in an aggregate principal amount of up to $25.0 million, which term loan agreement matures and becomes payable on the date that is eighteen months from its closing date.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward contracts, future contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, repurchase agreements, reverse repurchase agreements, sell buy backs and buy sell back agreements, and securities lending and borrowing agreements, or any other similar transactions or any combination of any of the foregoing (including any option to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Total Collateral Value” means, as of any date of determination, the aggregate Value of the Collateral in which the Collateral Agent, for the benefit of the Notes Secured Parties, has a first-priority perfected Lien (other than Liens permitted or not prohibited by the Indenture) as of such date.
“Treasury Management Agreements” means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, funds transfer, automated clearinghouse, zero balance accounts, cash pooling (including notional cash pooling), returned check, concentration, controlled disbursement, lockbox, account reconciliation and reporting, trade finance services, commercial credit cards, merchant card services, purchase or debit cards (including noncard e-payables services), and any other deposit or operating account relationships or other treasury, cash management or similar services, and in each case including any associated lines or extensions of credit and related customary guarantees, collateral and security arrangements and other credit support.
-20-
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.
“Trustee” means U.S. Bank Trust Company, National Association, in its capacity as trustee, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
“Uniform Commercial Code” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York; provided that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of, or remedies with respect to, any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions hereof relating to such perfection, priority or remedies.
“U.S. Government Obligations” means securities that are: (1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.
“U.S. Person” means a U.S. person as defined in Rule 902(k) under the Securities Act.
“Value” means, as of any date of determination, the net asset value reflected in the books and records of the Issuer and its Subsidiaries in accordance with GAAP (without, for the avoidance of doubt, any duplication as between the asset value of any assets held by, and any equity interest in, any particular Subsidiary).
“Voting Interests” means, with respect to any Person, securities of any class or classes of Capital Interests in such Person, taking into account the voting power of such securities, entitling the holders thereof generally to vote on the election of members of the board of directors or comparable body of such Person (other than securities or interests having such power only by reason of the happening of a contingency).
“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person, 100.0% of the outstanding Capital Interests of which (other than directors’ qualifying shares and shares of Capital Interests of foreign Subsidiaries issued to foreign nationals as required under applicable law) shall at the time be owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.
-21-
SECTION 1.02. Other Definitions.
| Term | Defined in Section |
| “Authentication Order” | 2.02 |
| “Covenant Defeasance” | 8.03 |
| “Event of Default” | 6.01 |
| “Legal Defeasance” | 8.02 |
| “Note Register” | 2.03 |
| “Notes” | Recitals |
| “Paying Agent” | 2.03 |
| “Redemption Date” | 3.01 |
| “Registrar” | 2.03 |
| “Transfer Agent” | 2.03 |
SECTION 1.03. Conflicts with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision which is required or deemed to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required or deemed to be included provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act term used in this Indenture has the following meaning:
“obligor” on the Notes of and the Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively.
All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.
SECTION 1.04. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c) “or” is not exclusive;
-22-
(d) the words “including,” “includes” and similar words shall be deemed to be followed by without limitation;
(e) words in the singular include the plural, and in the plural include the singular;
(f) “will” shall be interpreted to express a command;
(g) provisions apply to successive events and transactions;
(h) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;
(i) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;
(j) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision;
(k) the principal amount of any Preferred Interests at any time shall be (i) the maximum liquidation value of such Preferred Interests at such time or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Interests at such time, whichever is greater;
(l) words used herein implying any gender shall apply to both genders;
(m) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”;
(n) the principal amount of any non-interest bearing Debt or other discount security constituting Debt at any date shall be the principal amount thereof that would be shown on a balance sheet of the Issuer dated such date prepared in accordance with GAAP; and
(o) unless otherwise specifically indicated, the term “consolidated” with respect to any Person means such Person consolidated with its Subsidiaries.
SECTION 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.
-23-
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.
(e) The Issuer may, in the circumstances permitted by the Trust Indenture Act, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 10 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.
(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.
ARTICLE II
THE NOTES
SECTION 2.01. Form and Dating; Terms.
(a) General. The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes shall be issued initially in minimum denominations of $25.00 and any integral multiple of $25.00 in excess of $25.00.
(b) Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Notes Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
-24-
(c) [Reserved].
(d) Book-Entry Provisions. The Applicable Procedures shall be applicable to Book-Entry Interests in the Global Notes that are held by Participants through the Depositary.
(e) Terms. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.
The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
The Notes shall not be redeemable, other than as provided in Article III hereof.
SECTION 2.02. Execution and Authentication. At least one Officer shall execute the Notes on behalf of the Issuer by manual, facsimile or electronic (in “.pdf” format) signature.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.
On the Issue Date, the Trustee shall, upon receipt of an Issuer’s Order (an “Authentication Order”) (upon which the Trustee may conclusively rely without inquiry, review or investigation), authenticate and deliver the Notes in the aggregate principal amount or amounts specified in such Authentication Order.
The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. Any such appointment shall be evidenced by an instrument signed by a Responsible Officer of the Trustee, a copy of which shall be furnished to the Issuer. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent for service of notices and demands.
SECTION 2.03. Registrar, Transfer Agent and Paying Agent. The Issuer shall maintain (i) an office or agency where Notes may be presented for registration (the “Registrar”), (ii) an office or agency where Notes may be presented for transfer or for exchange (the “Transfer Agent”) and (iii) an office or agency where Notes may be presented for payment (the “Paying Agent”). The Registrar shall keep a register (the “Note Register”) reflecting ownership of the Notes outstanding from time to time and of their transfer and exchange. Upon demand by the Issuer, the Registrar shall (at the expense of the Issuer) send a copy of the Note Register to the Issuer. The registered Holder will be treated as the owner of the Note for all purposes. Only registered Holders will have rights under this Indenture and the Notes. The Issuer may appoint one or more co-registrars, one or more co-transfer agents and one or more additional paying agents. The term “Registrar” includes any co-registrar, the term “Transfer Agent” includes any co-transfer agent and the term “Paying Agent” includes any additional paying agents. The Issuer may change any Paying Agent, Transfer Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar, Transfer Agent or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent, Transfer Agent or Registrar.
-25-
The Issuer initially appoints the Trustee to act as the Paying Agent, Transfer Agent and Registrar.
SECTION 2.04. Paying Agent Provisions. The Issuer shall require any Paying Agent that is not a party to this Indenture to agree in writing that such Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by such Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee for its own benefit and for the benefit of the Holders. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee for its own benefit and for the benefit of the Holders. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary or the Trustee) shall have no further liability for the money. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee or an agent thereof shall serve as Paying Agent for the Notes.
SECTION 2.05. Holder Lists. The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with Trust Indenture Act Section 312(a). The Issuer shall furnish, or cause the Registrar to furnish (if the Trustee is not the Registrar), to the Trustee, in writing and at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders and the Issuer shall otherwise comply with Trust Indenture Act Section 312(a).
SECTION 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial interest in a Global Note may not be exchanged for a Definitive Note of the same series unless (A) if the Depositary notifies the Issuer that it is unwilling or unable to continue to act as depositary and a successor depositary is not appointed by the Issuer within 90 days, (B) if the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed by the Issuer within 90 days, (C) if the Issuer, at its option, notifies the Trustee that the Issuer elects to cause the issuance of Definitive Notes or (D) if an Event of Default has occurred and is continuing with respect to the Notes and the Depositary has requested the issuance of Definitive Notes. Upon the occurrence of any of the events in clauses (A) through (D) above, Definitive Notes delivered in exchange for any Global Note of the same series or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note of the same series or any portion thereof, pursuant to this Section 2.06 or Sections 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events in (A) through (D) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided, however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (c) hereof.
-26-
(b) Transfer and Exchange of Book-Entry Interests. The transfer and exchange of Book-Entry Interests shall be effected through the Depositary in accordance with the provisions of this Indenture and the Applicable Procedures. Transfers of beneficial interests in the Global Notes also will require compliance with either Section 2.06(b)(1) or 2.06(b)(2) below, as applicable:
(1) Transfer of Book-Entry Interests in the Same Global Note. Beneficial interests in any Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in a Global Note. No written orders or instructions shall be required to be delivered to the Trustee to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Book-Entry Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Transfer Agent (with copies to the Trustee and the Registrar) either:
both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a Book-Entry Interest in another Global Note in an amount equal to the Book-Entry Interest to be transferred or exchanged; and
(ii) instructions given by the Depositary in accordance with the Applicable Procedures containing information regarding the Participant’s account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the Book-Entry Interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar containing information specifying the identity of the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above, the principal amount of such securities and the CUSIP or ISIN or other similar number identifying the Notes.
Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h).
(c) Transfer or Exchange of Book-Entry Interests for Definitive Notes. If any holder of a Book-Entry Interest in a Global Note proposes to exchange such Book-Entry Interest for a Definitive Note or to transfer such Book-Entry Interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) and written notice to the Trustee, Transfer Agent and Registrar, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer will execute and, upon the receipt of an Authentication Order, the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered.
-27-
(d) Transfer and Exchange of Definitive Notes for Book-Entry Interests in the Global Notes. If any Holder of a Definitive Note proposes to exchange such Note for a Book-Entry Interest in a Global Note or to transfer such Definitive Notes to a Person who takes delivery thereof in the form of a Book-Entry Interest in a Global Note, then, upon receipt by the Trustee, the Transfer Agent and the Registrar of a request for such an exchange or transfer, the Trustee or the Registrar will cancel the Definitive Note, and the Trustee or the Notes Custodian, acting at the direction of the Trustee, will increase or cause to be increased the aggregate principal amount of the Global Note. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to the previous sentence at a time when a Global Note has not yet been issued, the Issuer will issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee will authenticate one or more Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Definitive Notes may be transferred or exchanged in whole or in part, in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, to Persons who take delivery thereof in the form of Definitive Notes in accordance with this Section 2.06(e). Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Transfer Agent or the Registrar will register the transfer or exchange of Definitive Notes of which registration the Issuer will be informed of by such Transfer Agent or such Registrar (as the case may be). Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Transfer Agent or the Registrar the Definitive Notes duly endorsed and accompanied by a written instruction of transfer in a form satisfactory to such Transfer Agent or such Registrar duly executed by such Holder or its attorney, duly authorized to execute the same in writing. In the event that the Holder of such Definitive Notes does not transfer the entire principal amount of Notes represented by any such Definitive Note, the Transfer Agent or the Registrar will cancel or cause to be cancelled such Definitive Note and the Issuer (who has been informed of such cancellation) shall execute and the Trustee or the authenticating agent shall authenticate and deliver to the requesting Holder and any transferee Definitive Notes in the appropriate principal amounts.
(f) [Reserved].
(g) Legend. Each Global Note issued under this Indenture, unless specifically stated otherwise in the applicable provisions of this Indenture, shall bear a legend in substantially the following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE OR THE NOTES CUSTODIAN, ACTING AT THE DIRECTION OF THE TRUSTEE, MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE, OR (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF TERRA PROPERTY TRUST, INC. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
-28-
(h) Cancellation and/or Adjustment of Global Notes. At such time as all Book-Entry Interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note will be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any Book-Entry Interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a Book-Entry Interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or the Notes Custodian, at the direction of the Trustee, to reflect such reduction; and if the Book-Entry Interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a Book-Entry Interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or the Notes Custodian, at the direction of the Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.
(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer shall require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06 and 9.05 hereof).
-29-
(iii) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Notes to be redeemed under Section 3.03 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, or (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date.
(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(v) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer shall deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.
(vi) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.
(vii) At the option of the Holder, subject to Section 2.06(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes to which the Holder making the exchange is entitled in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Issuer pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile or electronic mail.
(ix) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Participants or beneficial owners of interests in any Global Notes) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(x) Neither the Trustee nor any Agent shall have any responsibility or liability for the actions taken or not taken by the Depositary nor shall the Trustee or any Agent have any obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of optional redemption) or the payment of any amount, under or with respect to such Notes.
-30-
(xi) In connection with any proposed transfer outside the book-entry system, there shall be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The Trustee may conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
SECTION 2.07. Replacement Notes. If either (x) any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer or (y) the Issuer and the Trustee receive evidence to their satisfaction of the ownership and destruction, loss or theft of any Note, then the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note. An indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note.
Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
SECTION 2.08. Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it (or by the Registrar or Paying Agent at its direction), those delivered to it or the Notes Custodian for cancellation, those reductions in the interest in a Global Note effected by the Trustee (or by the Notes Custodian at its direction) in accordance with the provisions hereof and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code).
If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor) holds, on a Redemption Date or maturity date, money sufficient to pay the Notes (or portions thereof) payable on that date, then on and after that date such Notes (or portions thereof) shall be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes beneficially owned by the Issuer or a Guarantor or by any Affiliate of the Issuer or a Guarantor, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to such pledged Notes and that the pledgee is not the Issuer or a Guarantor or any Affiliate of the Issuer or a Guarantor.
SECTION 2.10. Temporary Notes. Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.
-31-
Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.
SECTION 2.11. Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such cancelled Notes in accordance with its customary procedures. Certification of the cancellation of all surrendered Notes shall be delivered to the Issuer at the Issuer’s written request. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest. If the Issuer defaults in a payment of interest on the Notes (and such nonpayment continues beyond the applicable grace period set forth in Section 6.01(2) hereof), it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed any such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of any such special record date. At least 15 days before any such special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) will deliver or cause to be delivered to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 2.13. CUSIP and/or ISIN Numbers. The Issuer in issuing the Notes may use CUSIP and/or ISIN numbers (if then generally in use) and, if so, the Trustee shall use CUSIP and/or ISIN numbers in notices of redemption as a convenience to Holders; provided that the Trustee shall not be responsible or liable for the accuracy of any CUSIP number printed on any Note, notice or elsewhere and any such notice shall state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee and each Paying Agent in writing of any change in the CUSIP and/or ISIN numbers.
-32-
SECTION 2.14. Conditions Precedent to Issuance
The Issuer hereby agrees, warrants and represents that it shall not provide the Trustee with an Issuer’s Order pursuant to Section 2.02, unless and until each of the following conditions precedent shall have been satisfied (or waived by the Holders of a majority in aggregate principal amount of the Notes to be issued on the Issue Date):
(a) the Security Documents shall have been duly executed and delivered by each party thereto, and
the Intercreditor Agreement shall have been duly executed and delivered by each party thereto, including the joinder thereto contemplated to be executed and delivered on the Issue Date.
ARTICLE III
REDEMPTION
SECTION 3.01. Notices to Trustee. If the Issuer elects to redeem the Notes pursuant to Section 3.07 hereof or if the Issuer is required to redeem the Notes pursuant to Section 3.08 hereof, it shall furnish to the Trustee, at least two Business Days (unless the Trustee agrees to a shorter period) before notice of redemption is required to be delivered to Holders pursuant to Section 3.03 hereof, an Officer’s Certificate (upon which the Trustee may conclusively rely without review or investigation) setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the date of redemption (the “Redemption Date”), (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price and such Officer’s Certificate shall be accompanied by an Opinion of Counsel (upon which the Trustee may conclusively rely without review, inquiry or investigation). For the avoidance of doubt and notwithstanding anything to the contrary contained herein, as per Section 9.02(1), there shall be no change to the date on which any Notes may be subject to redemption or a reduction in the redemption price therefor, or waiver of any provision of this Indenture with respect to the redemption of the Notes, or waiver of any redemption payment with respect to the Notes.
SECTION 3.02. Selection of Notes to Be Redeemed. If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed (i) if the Notes are listed on an exchange, in compliance with the requirements of such exchange or (ii) if the Notes are not listed on an exchange, on a pro rata basis to the extent practicable, or, if the pro rata basis is not practicable for any reason, by lot or by such other method as the Trustee shall deem fair and appropriate and otherwise in accordance with the Applicable Procedures. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 10 nor (except in the event the Redemption Date is delayed as a result of any condition precedent to the occurrence thereof not being satisfied or waived by the Issuer) more than 60 days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. No Notes of $25.00 or less, may be redeemed in part, except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption. The Issuer shall deliver electronically, mail or cause to be mailed by first-class mail, postage prepaid notices of redemption at least 10 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with Applicable Procedures, except that redemption notices may be delivered or mailed more than 60 days prior to a Redemption Date if the notice is (a) issued in connection with Article VIII or Article XI hereof or (b) subject to one or more conditions precedent and such Redemption Date is delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion).
-33-
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the redemption price;
(c) if any Definitive Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;
(g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;
(h) the CUSIP and ISIN number, if any, printed on the Notes being redeemed and that no representation is made as to the correctness or accuracy of any such CUSIP or ISIN number that is listed in such notice or printed on the Notes; and
(i) any condition to such redemption.
At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense; provided that the Issuer shall have delivered to the Trustee, at least two Business Days before notice of redemption is required to be delivered, mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
If any redemption is subject to satisfaction of one or more conditions precedent, the notice of redemption in respect thereof shall describe each such condition, and if applicable, shall state that, in the Issuer’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion), or that such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Issuer in its sole discretion) by the Redemption Date as stated in such notice, or by the Redemption Date as so delayed. The Issuer may provide in such notice that payment of the redemption price and performance of the Issuer’s obligations with respect to such redemption may be performed by another Person.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is delivered in accordance with Section 3.03 hereof, subject to satisfaction of any conditions precedent relating thereto specified in the applicable notice of redemption, Notes called for redemption shall become irrevocably due and payable on the Redemption Date at the redemption price. The notice, if delivered, mailed or caused to be mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to deliver such notice or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof, on and after the Redemption Date, interest shall cease to accrue on Notes or portions of Notes called for redemption.
-34-
SECTION 3.05. Deposit of Redemption Price.
(a) Prior to 10:00 a.m. (New York City time) on the Redemption Date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes to be redeemed on that Redemption Date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed.
(b) If the Issuer complies with the provisions of the preceding paragraph (a), on and after the Redemption Date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the Redemption Date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the Redemption Date until such principal is paid, and to the extent lawful on any interest accrued to, but excluding, the Redemption Date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Definitive Note that is redeemed in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed portion of the Note surrendered representing the same indebtedness to the extent not redeemed; provided, that each new Note will be in a principal amount of $25.00 and any integral multiple of $25.00 in excess of $25.00. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.
SECTION 3.07. Optional Redemption.
The Notes may be redeemed in whole or in part at any time or from time to time at the Issuer’s option prior to the Stated Maturity, upon not less than 10 days nor more than 60 days written notice prior to the Redemption Date, at a redemption price of 102% of the outstanding principal amount of the Notes to be redeemed plus accrued and unpaid interest otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the Redemption Date.
(a) Notwithstanding anything to the contrary set forth in this Section 3.07, in connection with any tender offer for the Notes, if Holders of not less than 90% in aggregate principal amount of the then outstanding Notes validly tender and do not validly withdraw such Notes in such offer and the Issuer, or any third party making such offer in lieu of the Issuer, purchases all of the Notes validly tendered and not validly withdrawn by such Holders, the Issuer or such third party will have the right upon not less than 10 nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s registered address or sent electronically in accordance with the procedures of DTC for global book-entry Notes (with a copy to the Trustee) and given not more than 60 days following such purchase date, to redeem all Notes that remain outstanding following such purchase at a price equal to the price offered to each other Holder in such offer (which may be less than par and excluding any early tender or incentive fee in such offer) plus, to the extent not included in the offer payment, accrued and unpaid interest, if any, thereon, to, but excluding, the Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date falling prior to or on the Redemption Date.
-35-
(b) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
(c) In addition to any redemption pursuant to this Section 3.07, the Issuer may at any time, and from time to time, purchase Notes in the open market, by tender offer, negotiated transaction or otherwise at different market prices, subject to compliance with applicable securities laws.
SECTION 3.08. Mandatory Redemption.
(a) Asset Sales.
(i) Upon the occurrence of any Specified Asset Sale by the Issuer or any of its subsidiaries, the Issuer shall, upon written notice to the holders of the Notes (with a copy to the Trustee) not less than five Business Days prior to the redemption date, redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Specified Asset Sale at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption, with such mandatory redemption to be made not later than the 10th Business Day following the receipt of such Net Cash Proceeds.
(ii) Upon the occurrence of any Asset Sale that does not constitute a Specified Asset Sale by the Issuer or any of its subsidiaries in any fiscal quarter (starting with the fiscal quarter ending September 30, 2026), the Issuer shall redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Asset Sale at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption; provided that the Issuer or its subsidiaries (as applicable) may, in lieu of making such redemption, at their option by written notice to the holders of the Notes (with a copy to the Trustee) on or prior to the third Business Day after the delivery of financial statements for the fiscal quarter in which such Asset Sale was consummated, reinvest such Net Cash Proceeds in assets that are used in the operation of the business of the Issuer or its subsidiaries (as applicable) so long as (x) the Issuer or such subsidiary shall have entered into a definitive agreement for the purchase of assets or property within 120 days following the receipt of such Net Cash Proceeds and (y) within 60 days following the end of such 120 day period, consummate the purchase of such assets, with the amount of such Net Cash Proceeds unused after such period to be applied as set forth under this Section 3.08(a)(ii). Written notice of any mandatory redemption of the Notes as set forth under this Section 3.08(a)(ii), together with the proceeds of any Asset Sale that does not constitute a Specified Asset Sale consummated in any fiscal quarter shall be provided to the holders of the Notes (with a copy to the Trustee) not later than the tenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter with the SEC, with such mandatory redemption to be made not later than the fifteenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter.
-36-
(b) Extraordinary Receipts. Upon the receipt of any Extraordinary Receipts by the Issuer or any of its subsidiaries in any fiscal quarter (starting with the fiscal quarter ending September 30, 2026), the Issuer shall redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Extraordinary Receipts at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption; provided that the Issuer or its subsidiaries (as applicable) may, in lieu of making such redemption, at their option by written notice to the holders of the Notes (with a copy to the Trustee) on or prior to the third Business Day after the delivery of financial statements for the fiscal quarter in which such Extraordinary Receipts were received, reinvest such Net Cash Proceeds in assets that are used in the operation of the business of the Issuer or its subsidiaries (as applicable) so long as (x) the Issuer or such subsidiary shall have entered into a definitive agreement for the purchase of assets or property within 120 days following the receipt of such Net Cash Proceeds and (y) within 60 days following the end of such 120 day period, consummate the purchase of such assets, with the amount of such Net Cash Proceeds unused after such period to be applied as set forth under this Section 3.08(b). Written notice of any mandatory redemption of the Notes as set forth under this Section 3.08(b), together with the proceeds of any Extraordinary Receipts received in any fiscal quarter, shall be provided to the holders of the Notes (with a copy to the Trustee) not later than the tenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter with the SEC, with such mandatory redemption to be made not later than the fifteenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter.
(c) Incurrence of Structurally Senior Debt. Upon the Incurrence by the Issuer or any of its subsidiaries of any Structurally Senior Debt, the Issuer shall, upon written notice to the holders of the Notes (with a copy to the Trustee) not less than ten Business Days nor more than 20 Business Days written notice prior to the redemption date, redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds received by the Issuer or such subsidiary in connection therewith, at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption, with such mandatory redemption to be made not later than the 25th Business Day following the receipt of such Net Cash Proceeds.
(d) Excess Cash Flow. For each fiscal quarter of the Issuer and its subsidiaries (commencing with the fiscal quarter ending September 30, 2026), the Issuer shall redeem an outstanding principal amount of the Notes in an amount equal to 50% of Excess Cash Flow of the Issuer and its subsidiaries for such fiscal quarter, at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption. Written notice of any mandatory redemption of the Notes as set forth under this Section 3.08(d), together with a calculation of Excess Cash Flow for such fiscal quarter, shall be provided to the holders of the Notes (with a copy to the Trustee) not later than the tenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter with the SEC, with such mandatory redemption to be made not later than the fifteenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter.
(e) Specific Exchange Notes Collateral Repayments. Upon the receipt of any Specific Exchange Notes Collateral Repayment by the Issuer or any of its subsidiaries, the Issuer shall, upon written notice to the holders of the Notes (with a copy to the Trustee) not less than five Business Days prior to the redemption date, redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Specific Exchange Notes Collateral Repayment at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption, with such mandatory redemption to be made not later than the tenth Business Day following the receipt of such Net Cash Proceeds.
-37-
(f) Any redemption pursuant to this Section 3.08 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof; provided that, notwithstanding anything to the contrary in Section 3.03, the notice periods and redemption timing set forth in this Section 3.08 shall govern with respect to any mandatory redemption required hereunder.
(g) Except as set forth in this Section 3.08, the Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to, or offer to purchase, any of the Notes.
(h) For the avoidance of doubt, in no event shall the Trustee be obligated to make any determinations or have any responsibility or obligation whatsoever with respect to any redemptions pursuant to this Section 3.08 and the notices or copies of notices provided to the Trustee related thereto. The notices or copies of notices provided to the Trustee pursuant to this Section 3.08 are for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with this Section 3.08 (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates and/or notices or copies of notices without review or investigation).
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Notes. The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor, holds as of 10:00 a.m. New York City time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful and the Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency. The Issuer shall maintain the offices or agencies (which may be an office of the Trustee or an affiliate of the Trustee, the Registrar or the Transfer Agent) required under Section 2.03 hereof where Notes may be surrendered for registration of transfer or for exchange or presented for payment and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee; provided, that the Trustee shall not be deemed an agent of the Issuer for service of legal process.
-38-
The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain such offices or agencies as required by Section 2.03 hereof for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.
SECTION 4.03. Reports by the Issuer.
(a) The Issuer will file with the Trustee, within 15 days after the Issuer is required to file the same with the SEC, copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) which the Issuer may be required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer is not required to file information, documents or reports pursuant to either of such Sections, then it will file with the Trustee and the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations.
(b) The Issuer will file with the Trustee and the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations. The Trustee shall transmit by mail to the Holders of Notes, within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in TIA Section 313(c), such summaries of any information, documents and reports required to be filed by the Issuer pursuant to subparagraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the SEC.
In no event shall the Trustee be obligated to determine whether or not any report, information or document shall have been filed with the SEC. Delivery of such reports, information, and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates).
SECTION 4.04. [Reserved].
SECTION 4.05. Issuer Existence. Subject to Article V hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence.
SECTION 4.06. Limitation on Dividends and Repurchases of Capital Interests. The Issuer will not (i) pay any Dividends except any Dividends required to maintain the REIT status of the Issuer and its subsidiaries (the “REIT Tax Dividends”), or (ii) purchase any shares of its outstanding Capital Interests.
SECTION 4.07. Limitation on Debt.
(a) The Issuer will not Incur any additional Senior Secured Notes prior to the Stated Maturity.
-39-
(b) Neither the Issuer nor any of its subsidiaries will Incur any Structurally Senior Debt unless (i) the Issuer shall have delivered to the Trustee an Officer’s Certificate (upon which the Trustee may conclusively rely without inquiry, review or investigation) at least ten (10) Business Days prior to such Incurrence certifying that the conditions set forth in this Section 4.07(b) have been satisfied and setting forth in reasonable detail the amount, terms and intended use of proceeds of such Structurally Senior Debt, and (ii) the Net Cash Proceeds of such Structurally Senior Debt are applied as set forth under Section 3.08(c) of this Indenture. For the avoidance of doubt, in no event shall the Trustee be obligated to make any determinations or calculations or have any responsibility or obligation whatsoever with respect to any matters related to this Section 4.07 (including, without limitation, this Section 4.07(b), whether the conditions set forth in this Section 4.07(b) have been satisfied, and the amount, terms and intended use of proceeds of any such Structurally Senior Debt) and the notices or copies of notices or Officer’s Certificate provided to the Trustee related thereto. The notices or copies of notices or Officer’s Certificate provided to the Trustee pursuant to this Section 4.07(b) are for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with this Section 4.07 (including, without limitation, this Section 4.07(b), whether the conditions set forth in this Section 4.07(b) have been satisfied, and the amount, terms and intended use of proceeds of any such Structurally Senior Debt) (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates and/or notices or copies of notices without inquiry, review or investigation).
(c) The Issuer will not Incur any Debt for borrowed money (other than the Notes Obligations, but excluding, in any event, (i) any ordinary course working capital Debt in an aggregate amount Incurred after the Issue Date not to exceed $5.0 million, (ii) any such Debt that constitutes an Asset Financing Facility, RE Financing, or Qualified Non-Recourse Debt, in an aggregate amount Incurred after the Issue Date not to exceed $25.0 million, and (iii) any Standard Recourse Undertakings in respect of the foregoing), unless the stated maturity date of such Debt is at least 91 days after the Stated Maturity of the Notes; provided that, for the avoidance of doubt, no such Debt shall be secured by any Lien on the Specific Exchange Notes Collateral. The Issuer shall deliver to the Trustee an Officer’s Certificate (upon which the Trustee may conclusively rely without inquiry, review or investigation) at least five (5) Business Days prior to the Incurrence of any such Debt certifying that the conditions set forth in this Section 4.07(c) have been satisfied and setting forth in reasonable detail the amount, terms and maturity date of such Debt. For the avoidance of doubt, in no event shall the Trustee be obligated to make any determinations or calculations or have any responsibility or obligation whatsoever with respect to any matters related to this Section 4.07(c) and the Officer’s Certificate provided to the Trustee related thereto is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with this Section 4.07 (including, without limitation, this Section 4.07(c) and whether the terms and conditions set forth in this Section 4.07(c) have been satisfied (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates and/or notices or copies of notices without inquiry, review or investigation)).
The accrual of interest, the accretion of principal, the amortization of original issue discount or debt discount, the payment of interest on Debt in the form of additional Debt, the obligation to pay a premium in respect of Debt arising in connection with the issuance of a notice of redemption or the making of a mandatory change of control offer or asset sale offer for such Debt, increases in the amount of Debt outstanding solely as a result of fluctuations in market value, exchange rates or currency values, in each case will be deemed not to be an Incurrence of Debt.
-40-
SECTION 4.08. Limitation on Payment of Operating Expenses. The Issuer will not pay any operating costs, expenses or other fees incurred in the ordinary course of business in excess of $3.0 million in any fiscal quarter (the “Budgeted Operating Expenses”) excluding, for the avoidance of doubt, (i) any amounts due under that certain Amended and Restated Management Agreement, dated as of February 18, 2018, by and between the Company and Terra REIT Advisors, LLC (as amended, restated, amended and restated, supplemented or other otherwise modified from time to time) and (ii) any fees or expenses incurred prior to or as of the issuance of the Notes.
SECTION 4.09. Payment of Transaction Fees and Expenses. The Issuer shall pay or reimburse on or around the Issue Date the reasonable and documented out-of-pocket fees, costs and expenses (including fees and disbursements of legal counsel) incurred by certain holders of the Existing Notes representing approximately 65.7% of the aggregate principal amount of the outstanding Existing Notes in an aggregate amount not to exceed $300,000.00.
SECTION 4.10. Grant of Liens by Subsidiaries and Affiliates. On or prior to the Issue Date, the Issuer shall (i) cause each of its direct and indirect subsidiaries and Affiliates that holds any Specific Exchange Notes Collateral to execute the Specific Exchange Notes Collateral Security Agreement or to execute joinders to the Specific Exchange Notes Collateral Security Agreement and grant first-priority Liens on the Specific Exchange Notes Collateral held by such subsidiary or Affiliate in favor of the Collateral Agent for the benefit of the Notes Secured Parties, and (ii) arrange for, reasonably assist in, and be responsible for the Notes Secured Parties’ perfection of all Collateral.
SECTION 4.11. Certification of Specific Exchange Notes Collateral. On the Issue Date and within fifteen (15) days following the end of each fiscal quarter thereafter (commencing with the fiscal quarter ending September 30, 2026), the Issuer shall deliver to the Trustee an Officer’s Certificate (upon which the Trustee may conclusively rely without inquiry, review or investigation) certifying as of the date thereof (i) that each item of Specific Exchange Notes Collateral identified in the definition thereof as of the Issue Date remains in existence and has not been sold, transferred, disposed of or otherwise released (other than in compliance with the terms of this Indenture or the Security Documents), (ii) whether any Specified Asset Sale or Specific Exchange Notes Collateral Repayment has occurred during the applicable period and, if so, the aggregate Net Cash Proceeds received in connection therewith and the manner in which such Net Cash Proceeds were applied in accordance with Section 3.08 of this Indenture, and (iii) that the Liens granted in favor of the Collateral Agent for the benefit of the Notes Secured Parties on the Specific Exchange Notes Collateral remain in full force and effect. For the avoidance of doubt, in no event shall the Trustee be obligated to make any determinations or calculations or have any responsibility or obligation whatsoever with respect to any matters related to this Section or the Officer’s Certificate provided to the Trustee related thereto. The Officer’s Certificate provided to the Trustee pursuant to this Section is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with this Section (as to which the Trustee is entitled to conclusively rely exclusively on Officer's Certificates without inquiry, review or investigation).
-41-
ARTICLE V
SUCCESSORS
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets.(a) The Issuer may not: (1) consolidate or merge with or into another Person (whether or not the Issuer is the surviving Person); or (2) sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of the properties or assets of the Issuer and its Subsidiaries taken as a whole, in one or more related transactions, to another Person; unless:
(1) either: (a) the Issuer is the surviving Person; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or to which such sale, assignment, transfer, conveyance, lease or other disposition has been made is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof;
(2) the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or the Person to which such sale, assignment, transfer, conveyance, lease or other disposition has been made assumes all the obligations of the Issuer under the Notes pursuant to a supplemental indenture and executes joinder agreements to the Security Documents or new Security Documents providing for a pledge of its assets as Collateral for the Notes and takes all actions required by the Security Documents to perfect the Liens created by the Security Documents; and
(3) immediately after giving pro forma effect to such transaction or series of transactions and any related financing transactions, no Default or Event of Default exists.
(b) Notwithstanding the foregoing, this Section 5.01 will not apply to a sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Issuer and any of the Guarantors (if any).
SECTION 5.02. Successor Person Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of all or substantially all of the properties or assets of the Issuer and its Subsidiaries, taken as a whole, in accordance with Section 5.01 hereof, the successor Person formed by such consolidation or into which the Issuer is merged or to which such sale, assignment, transfer, conveyance, lease or other disposition is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture and the Security Documents with the same effect as if such successor had been named as the Issuer therein. When a successor assumes all the obligations of its predecessor under this Indenture, the Notes and the Security Documents following a consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of all or substantially all of the assets of the predecessor in accordance with Section 5.01 hereof, the predecessor shall be automatically released from those obligations.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. An “Event of Default,” wherever used herein, means any one of the following events:
(1) the Issuer does not pay the principal (or premium, if any) of any Note when due;
-42-
(2) the Issuer does not pay interest on any Note when due, and such default is not cured within 5 days;
(3) the Issuer remains in breach of a covenant in respect of the Notes for 30 days after the Issuer receives a written notice of default stating the Issuer is in breach (which notice has been sent by either the Trustee or Holders of at least 25% of the principal amount of the Notes outstanding);
(4) the occurrence of any of the following: (a) except as permitted by the Indenture, any Security Document or the Intercreditor Agreement ceases for any reason to be fully enforceable, in each case, on any material portion of the Collateral purported to be covered thereby; (b) except as permitted by the Indenture, any Lien purported to be granted under any Security Document on any material portion of the Collateral, ceases to be a valid, enforceable and perfected Lien with the priority required by the Security Documents; or (c) the Issuer, or any Person acting on behalf of it, denies or disaffirms, in any pleading in any court of competent jurisdiction, any material obligation of the Issuer set forth in or arising under any Security Document:
(5) the Issuer, pursuant to or within the meaning of any Bankruptcy Law:
(i) commences proceedings to be adjudicated bankrupt or insolvent;
(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;
(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;
(iv) makes a general assignment for the benefit of its creditors; or
(v) generally is not paying its debts as they become due;
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Issuer in a proceeding in which the Issuer is to be adjudicated bankrupt or insolvent;
(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or for all or substantially all of the property of the Issuer; or
(iii) orders the liquidation of the Issuer;
and the order or decree remains unstayed and in effect for 60 consecutive days;
A Default under clause (3) of this Section 6.01 will not become an Event of Default until the Trustee or the Holders of at least 25.0% in principal amount of the Notes then outstanding notify the Issuer of the Default and the Issuer does not cure such Default within the time period specified after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”
-43-
SECTION 6.02. Acceleration. If any Event of Default (other than an Event of Default specified in clause (5) or (6) of Section 6.01 hereof) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 25.0% in principal amount of the then total outstanding Notes by notice to the Issuer may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Upon the effectiveness of such declaration, the principal of, premium, if any, and interest on the Notes shall be due and payable immediately. The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if a Responsible Officer of the Trustee determines that withholding notice is in the Holders’ interest. The Trustee shall have no obligation to accelerate the Notes if the Trustee in its best judgment determines that acceleration is not in the best interests of the Holders.
Notwithstanding the foregoing, in the case of an Event of Default arising under clause (5) or (6) of Section 6.01 hereof with respect to the Issuer, all outstanding Notes shall become due and payable immediately without further action or notice.
The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under this Indenture (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder) and rescind any acceleration with respect to the Notes and its consequences (except if such rescission would conflict with any judgment of a court of competent jurisdiction).
SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee or the Collateral Agent may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes, the Security Documents or this Indenture.
The Trustee or the Collateral Agent may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee, the Collateral Agent or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. Subject to Section 6.02 and 9.02 hereof, Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. Control by Majority. Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Collateral Agent or of exercising any trust or power conferred on the Trustee or the Collateral Agent. The Trustee or the Collateral Agent, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee or the Collateral Agent determines is unduly prejudicial to the rights of any other Holder (provided, however, that neither the Trustee nor the Collateral Agent shall have any affirmative duty to determine whether any such direction is unduly prejudicial to the rights of any other Holder) or that would involve the Trustee or the Collateral Agent in personal liability. In the event the Trustee receives inconsistent or conflicting directions from two or more groups of Holders, each representing less than a majority in aggregate principal amount of the Notes outstanding, the Trustee, in its sole discretion, may determine what action, if any, shall be taken or not taken.
-44-
SECTION 6.06. Limitation on Suits. No Holder of a Note may pursue any remedy with respect to this Indenture or the Notes (subject to the Intercreditor Agreement) unless:
(1) such Holder has previously given the Trustee and the Collateral Agent written notice that an Event of Default is continuing;
(2) Holders of at least 25.0% in principal amount of the total outstanding Notes have requested in writing the Trustee and/or the Collateral Agent to pursue the remedy;
(3) Holders have offered the Trustee and/or the Collateral Agent, as applicable, security or indemnity reasonably satisfactory to it against any loss, liability or expense;
(4) the Trustee and/or the Collateral Agent, as applicable, has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and
(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee and/or the Collateral Agent, as applicable, a direction inconsistent with such written request within such 60-day period.
SECTION 6.07. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and their respective agents and counsel to the extent required to be paid under Section 7.07 hereof.
SECTION 6.08. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.
SECTION 6.09. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.10. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
-45-
SECTION 6.11. Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and their respective agents and counsel to the extent required to be paid under Section 7.07 hereof) and the Holders allowed in any judicial proceedings relative to the Issuer (or any other grantor or obligor upon the Notes including the Guarantors), its creditors or its property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee on behalf of such Holder, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee and the Collateral Agent any amount due to them for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and their respective agents and counsel required to be paid under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and their respective agents and counsel, and any other amounts required to be paid to the Trustee and the Collateral Agent under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee or the Collateral Agent to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee or the Collateral Agent to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.12. Priorities. Subject to the terms of the Security Documents and the Intercreditor Agreement, if the Trustee, the Collateral Agent or any Agent collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:
(i) to the Trustee, the Collateral Agent, such Agent and their respective agents and attorneys for amounts due under Section 7.07 hereof and under the Security Documents and the Intercreditor Agreement, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee, the Collateral Agent or such Agent and the costs and expenses of collection;
(ii) to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and
(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct, including a Guarantor, if applicable.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.12.
-46-
SECTION 6.13. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.13 does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.14 or a suit by Holders of more than 10.0% in principal amount of the then outstanding Notes.
SECTION 6.14. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest and premium on the Notes held by such Holder, on the respective due dates expressed in the Notes (or, in the case of a redemption, on the redemption date), or to institute suit for the enforcement of any such payment, shall be absolute and unconditional and shall not be impaired or affected without the consent of such Holder.
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture on behalf of the Holders, and use the same degree of care and skill in its exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.
(b) Subject to clause (a) above:
(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of willful misconduct or bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.02, 6.04 or 6.05 hereof.
-47-
(d) Whether or not therein expressly so provided, every provision of this Indenture, the Security Documents and the Intercreditor Agreement that in any way relates to the Trustee is subject to clauses (a), (b) and (c) of this Section 7.01.
(e) The Trustee and the Collateral Agent shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders unless the Holders have offered to the Trustee or the Collateral Agent, as applicable, indemnity or security reasonably satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with such request or direction.
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(b) The Trustee may retain professional advisers to assist it in performing its duties under this Indenture. Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the discretion or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer.
(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.
(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.
-48-
(h) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each Agent, custodian and other Person employed to act hereunder, including, for the avoidance of doubt, the Collateral Agent.
(j) The Trustee shall have no duty to inquire as to the performance of the Issuer with respect to the covenants contained in Article IV. The Trustee shall have no duty to review or analyze reports delivered to it. Delivery of reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not imply a duty to review nor shall it constitute actual or constructive notice or knowledge of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).
(k) The permissive rights of the Trustee to take certain actions under this Indenture shall not be construed as a duty unless so specified herein.
(l) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer, and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(m) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
(n) The Trustee may request that the Issuer deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
(o) The Trustee and the Paying Agent shall be entitled to make payments net of any taxes or other sums required by any applicable law to be withheld or deducted.
(p) The Trustee shall have no obligation to act, suffer, or refrain from acting in accordance with the direction of any person or pursuant to this Indenture or the other bond documents if it believes that such compliance would involve it in violation of any Federal or state law, rule, regulation, order or other directive or any policy, including the implementation, interpretation or enforcement thereof, of any federal or state governmental entity.
-49-
(q) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of gross negligence or willful misconduct on its part, as determined by a court of competent jurisdiction in a final non-appealable order, conclusively rely upon an Officer’s Certificate.
(r) Before taking any action hereunder at the request or direction of the beneficial owners or Holders, the Trustee may require that security or indemnity satisfactory to it be furnished to it for the reimbursement of its fees, costs, liabilities and all expenses (including reasonable attorneys’ fees and expenses) which it may incur and to protect it against all liability, except liability which may result from its gross negligence or willful misconduct, by reason of any action so taken. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
(s) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(t) Holders will make their own decisions regarding actions relevant to the trust and will not rely on the Trustee with respect to such decisions.
(u) The Trustee may employ or retain such counsel, accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of determining and discharging its rights and duties hereunder and shall not be responsible for any misconduct on the part of any of them.
(v) It shall not be the duty of the Trustee to see that any duties or obligations imposed herein upon the Issuer or other persons are performed, and the Trustee shall not be liable or responsible for the failure of the Issuer or such other persons to perform any act required of them by this Indenture.
(w) The Trustee may request that the Issuer deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
(x) Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer’s Order and any resolution of the Board of Directors may be sufficiently evidenced by a resolution of the Board of Directors.
SECTION 7.03. Individual Rights of Trustee. The Trustee and the Collateral Agent, as applicable, in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Trustee or Collateral Agent. However, in the event that the Trustee acquires any conflicting interest under the Trust Indenture Act, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Section 7.10 hereof.
SECTION 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Security Documents, the Intercreditor Agreement or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or therein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture or such other documents other than its certificate of authentication.
-50-
SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall deliver to Holders a notice of the Default within 90 days after it occurs. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a Responsible Officer of the Trustee in good faith determines that withholding the notice is in the interests of the Holders.
SECTION 7.06. Trustee Reports. Within 60 days after each November 1 beginning with November 1, 2026, and for so long as Notes remain outstanding, the Trustee shall deliver to each Holder a brief report dated as of November 1 in accordance with, and to the extent required under, Trust Indenture Act Section 313(a) (but if no event described in Trust Indenture Act Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). During the same time period specified above, the Trustee also shall comply with Trust Indenture Act Section 313(b), which section relates to the release or substitution of certain property from the Lien of this Indenture and advances made by the Trustee. The Trustee will also transmit by mail all reports as required by Trust Indenture Act Section 313(c). A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed in accordance with Trust Indenture Act Section 313(d).
SECTION 7.07. Compensation and Indemnity. The Issuer shall pay to each of the Trustee and the Collateral Agent from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. Such compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse each of the Trustee and the Collateral Agent promptly upon request for all reasonable and documented out-of-pocket disbursements, advances and expenses properly incurred or made by it. Such expenses shall include the reasonable and documented compensation, disbursements and expenses of the Trustee’s and the Collateral Agent’s agents and counsel.
The Issuer and the Guarantors, jointly and severally, shall indemnify each of the Trustee and any predecessor Trustee and the Collateral Agent and any predecessor Collateral Agent and their respective officers, directors, employees, representatives and agents, for, and hold them harmless against, any and all loss, damage, claims, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the acceptance or administration of this trust and the performance of their respective duties hereunder and under the Security Documents and Intercreditor Agreement (including the reasonable costs and expenses of enforcing this Indenture, the Security Documents or the Intercreditor Agreement against the Issuer or any of the Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer or any Guarantor, or any other Person or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder or thereunder) (but excluding taxes imposed on such Persons in connection with compensation for such administration or performance). The Trustee or the Collateral Agent, as the case may be, shall notify the Issuer promptly of any third-party claim for which it may seek indemnity of which it has received written notice. Failure by the Trustee or the Collateral Agent to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim, with counsel reasonably satisfactory to the Trustee and the Collateral Agent, as applicable, and each of the Trustee and the Collateral Agent shall provide reasonable cooperation at the Issuer’s expense in the defense. Each of the Trustee and the Collateral Agent may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel; provided that if the defendants in any such claim include both (i) the Issuer, on the one hand and (ii) the Trustee and/or the Collateral Agent on the other hand, and the Trustee and/or Collateral Agent, as relevant, shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Issuer, or the Trustee and/or Collateral Agent has concluded that there may be any other actual or potential conflicting interests between the Issuer and the Trustee and/or Collateral Agent, the Trustee and Collateral Agent shall have the right to select separate counsel and the Issuer shall be required to pay the reasonable fees and expenses of such separate counsel. Any settlement which affects the Trustee and/or the Collateral Agent may not be entered into without the written consent of the Trustee and the Collateral Agent, unless the Trustee and the Collateral Agent are given a full and unconditional release from liability with respect to the claims covered thereby and such settlement does not include a statement or admission of fault, culpability or failure to act by or on behalf of the Trustee and/or the Collateral Agent. Any settlement by the Trustee and/or the Collateral Agent which affects the Issuer may not be entered into without the written consent of the Issuer, unless such settlement does not include a statement or admission of fault, culpability or failure to act by or on behalf of the Issuer.
-51-
The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee or the Collateral Agent, as applicable.
To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the Trustee and the Collateral Agent shall have a Lien prior to the Notes on all money or property held or collected by the Trustee or the Collateral Agent, except for money or property held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee or the Collateral Agent incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) hereof occurs, the expenses and the compensation for the services (including the reasonable fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing not less than 30 days prior to the effective date of such removal. The Issuer may remove the Trustee if:
(A) the Trustee fails to comply with Section 7.10 hereof;
(B) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(C) a custodian or public officer takes charge of the Trustee or its property; or
(D) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.
If a successor Trustee does not take office within 45 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
-52-
If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
The resigning Trustee shall have no responsibility or liability for any action or inaction of a successor Trustee.
SECTION 7.09. Successor Trustee by Merger, etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification. There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power and which is generally recognized as a corporation which customarily performs such corporate trustee roles and provides such corporate trustee services in transactions similar in nature to the offering of the Notes as described in the Registration Statement and that has a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of Trust Indenture Act Sections 310(a)(1), (2) and (5). The Trustee is subject to Trust Indenture Act Section 310(b); provided, however, there will be excluded from the operation of Trust Indenture Act Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) are met. If the Trustee acquires any “conflicting interest” (as defined in 310(b) of the TIA) it must comply with the applicable provisions of Section 310 of the TIA in respect of such conflicting interest. The Trustee is subject to Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA.
SECTION 7.11. Intercreditor Agreement and Security Documents. By acceptance of the Notes, the Holders shall be deemed to hereby (i) authorize and direct the Trustee and the Collateral Agent, as the case may be, to execute and deliver the Intercreditor Agreement (on behalf of the Collateral Agent, the Trustee and the Holders) and the Security Documents or Intercreditor Agreement in which it is named as a party, including any Security Documents executed after the Issue Date in accordance with Article XIII, in each case, including such changes from the forms, if any attached to this Indenture or any other agreements, as may be necessary or desirable (as determined by the Issuer) in connection with the execution thereof, (ii) authorize and appoint the Trustee to act as their Authorized Representative (as defined in the Intercreditor Agreement) and the Collateral Agent to act as their Notes Collateral Agent (as defined in the Intercreditor Agreement) under the Intercreditor Agreement, and agree that as such (x) the Trustee and the Collateral Agent will be deemed to be a party to the Intercreditor Agreement as trustee and agent for the Holders and (y) the Collateral Agent, the Trustee and the Holders will be subject to and bound by the provisions of the Intercreditor Agreement as Notes Secured Parties (as defined in the Intercreditor Agreement), (iii) accept and authorize the Collateral Agent, as Collateral Agent for itself, the Trustee and the Holders under the Security Documents and the Intercreditor Agreement, to take such action as agent on their behalf and to exercise such powers under the Security Documents and the Intercreditor Agreement as are delegated to the Collateral Agent by the terms thereof and (y) accept and acknowledge the terms of the Intercreditor Agreement applicable to them and agree to be bound by the terms thereof applicable to holders of the Notes Obligations (as defined in the Intercreditor Agreement) with all the rights and obligations of a Secured Party (as defined in the Security Documents) thereunder and bound by all the provisions thereof. It is hereby expressly acknowledged and agreed that, in taking the foregoing actions, the Trustee and the Collateral Agent are not responsible for the terms or contents of such agreements, or for the validity or enforceability thereof, or the sufficiency thereof for any purpose. Whether or not so expressly stated therein, in entering into, or taking (or forbearing from) any action under pursuant to, the Intercreditor Agreement and the Security Documents, the Trustee and the Collateral Agent each shall have all of the rights, immunities, indemnities and other protections granted to them under this Indenture (in addition to those that may be granted to them under the terms of such other agreement or agreements).
-53-
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. The Issuer may, at its option and at any time, elect to have either Section 8.02 or Section 8.03 hereof applied to all outstanding Notes and all obligations of the Guarantors with respect to the Guarantees upon compliance with the conditions set forth below in this Article VIII.
SECTION 8.02. Legal Defeasance and Discharge. Upon the Issuer’s exercise under Section 8.01 hereof of the option under this Section 8.02, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Guarantees and have its and each Guarantor’s obligations discharged with respect to the Security Documents on the date the conditions set forth below are satisfied (“Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuer and the Guarantors shall be deemed to have paid and discharged the entire Debt represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof, to have cured all then existing Events of Default and to have satisfied all its other obligations under such Notes and this Indenture including that of the Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:
(A) the rights of Holders to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;
(B) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(C) the rights, powers, trusts, duties, indemnities and immunities of the Trustee and the Collateral Agent, and the Issuer’s obligations in connection therewith; and
(D) this Section 8.02.
Subject to compliance with this Article VIII, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
-54-
SECTION 8.03. Covenant Defeasance Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.03 and 4.06 hereof and clause (3) of Section 5.01(a) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and the Guarantees, the Issuer and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and the Guarantees shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) (solely with respect to the covenants that are released upon a Covenant Defeasance), 6.01(4), 6.01(5) and 6.01(6) hereof shall not constitute Events of Default.
SECTION 8.04. Conditions to Legal or Covenant Defeasance. In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:
(1) the Issuer must irrevocably deposit in trust with the Trustee for the benefit of all Holders of the Notes a combination of cash and U.S. Government Obligations, as per the written opinion of a nationally recognized firm of independent public accountants, that will generate enough cash to make interest, principal and any other payments on the Notes on their various due dates;
(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions, there has been a change in current U.S. federal tax law or an IRS ruling that allows the Issuer to make the deposit set forth in the preceding clause (1) without causing you to be taxed on the Notes any differently than if the Issuer did not make the deposit set forth in the preceding clause (1);
(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions, under current U.S. federal income tax law, the Issuer may make the deposit set forth in the preceding clause (1) without causing you to be taxed on the Notes any differently than if the Issuer did not make the deposit set forth in the preceding clause (1);
(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit and no Defaults or Events of Default related to bankruptcy, insolvency or reorganization shall occur during the next 181 days;
(5) [reserved];
(6) [reserved]; and
-55-
(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.
Notwithstanding the foregoing, any Opinion of Counsel required by the immediately preceding paragraph with respect to Legal Defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.
The Collateral will be released from the Lien securing the Notes as provided under Section 13.03 upon a Legal Defeasance or Covenant Defeasance in accordance with the provisions described above.
SECTION 8.05. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and interest, but such money need not be segregated from other funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Dollars or U.S. Government Obligations deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or U.S. Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(2) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. Repayment to Issuer. Subject to any applicable abandoned property law, any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.
SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is unable to apply any Dollars or U.S. Government Obligations in accordance with Section 8.02 or Section 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s and the Guarantors’ obligations under this Indenture and the Notes, the Guarantees and the Security Documents shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or Section 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or Section 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
-56-
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders. Notwithstanding Section 9.02 hereof, the Issuer, any Guarantor (with respect to a Guarantee or this Indenture to which it is a party) and the Trustee and the Collateral Agent, as applicable, may amend or supplement this Indenture, any Guarantee, any Security Document, the Intercreditor Agreement or Notes without the consent of any Holder or any other party hereto:
(1) (i) to evidence the succession of another Person to the Issuer and the assumption by any such successor of the covenants of the Issuer in this Indenture and the Notes or (ii) to comply with the covenant set forth in Article V of this Indenture;
(2) to add to the covenants of the Issuer for the benefit of the Holders, or to surrender any right or power conferred upon the Issuer in the Indenture;
(3) to add additional Events of Default;
(4) to provide for uncertificated Notes in addition to or in place of the certificated Notes; provided that such uncertificated Notes are in registered form within the meaning of Section 163(f) of the Internal Revenue Code;
(5) to evidence and provide for the acceptance of appointment under this Indenture by a successor Trustee;
(6) [reserved];
(7) to add a Guarantor or to release a Guarantor in accordance with the terms of this Indenture;
(8) to cure or reform any ambiguity, defect, omission, mistake, manifest error or inconsistency or to conform this Indenture, the Notes, the Security Documents or the Intercreditor Agreement to any provision of the “Description of Notes” in the Registration Statement to the extent that the provision in the “Description of Notes” was intended to be a nearly verbatim recitation of this Indenture, the Notes, the Security Documents or the Intercreditor Agreement which intent shall be established by an Officer’s Certificate;
(9) to comply with any requirements of the SEC with respect to the qualification of this Indenture under the Trust Indenture Act;
(10) to provide additional rights or benefits to the Holders or to make any change that does not adversely affect the rights of any Holder in any material manner;
-57-
(11) to make, complete or confirm any grant of Lien in favor of the Collateral Agent in any property or assets, including any Collateral permitted or required by this Indenture or any of the Security Documents or any release of Collateral that becomes effective as set forth in this Indenture or any of the Security Documents;
(12) to evidence and provide for the acceptance and appointment under the Intercreditor Agreement or any Security Document of any new or successor Collateral Agent thereunder pursuant to the requirements thereof; or
(13) to add Collateral to, or release Collateral from, the Liens securing the Notes, in each case solely to the extent expressly required or expressly permitted by a specific provision of this Indenture, the Security Documents or the Intercreditor Agreement, and solely to designate any Collateral as Shared Collateral or Specific Exchange Notes Collateral hereunder subject to compliance with the applicable requirements set forth in this Indenture, the Security Documents and the Intercreditor Agreement; provided that no such amendment or supplement shall limit, reduce, subordinate, impair or otherwise adversely affect the Specific Exchange Notes Collateral existing as of the Issue Date or the Liens thereon securing the Notes without the consent of the holders of not less than 66 2/3% in aggregate principal amount of the outstanding Notes.
Upon the request of the Issuer accompanied by a resolution of the Board of Directors authorizing the execution of any such amended or supplemental indenture or amendment to the Security Documents or Intercreditor Agreement, and upon receipt by the Trustee and the Collateral Agent of the documents described in Section 7.02 hereof (to the extent requested by the Trustee or the Collateral Agent), the Trustee and the Collateral Agent shall join with the Issuer and the Guarantors in the execution of any amended or supplemental indenture or amendment to the Security Documents or the Intercreditor Agreement authorized or permitted by the terms of this Indenture, the Security Documents or the Intercreditor Agreement and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee and the Collateral Agent shall have the right, but not be obligated to, enter into any such amended or supplemental indenture or amendment to the Security Documents or Intercreditor Agreement that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, neither an Opinion of Counsel nor an Officer’s Certificate shall be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor, the Trustee and the Collateral Agent of a supplemental indenture to this Indenture, the form of which is attached as Exhibit B hereto and any supplement to the Security Documents and the Intercreditor Agreement in connection with the same, provided that the execution thereof shall be deemed a representation by such Guarantor(s) that all conditions precedent and covenants, if any, relating to the execution of such supplemental indenture have been satisfied and the supplemental indenture and any supplement to the Security Documents and the Intercreditor Agreement in connection with the same is enforceable in accordance with its terms subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and similar laws affecting the rights and remedies of creditors generally and (ii) general principles of equity.
SECTION 9.02. With Consent of Holders. Except as provided below in this Section 9.02, the Issuer, the Guarantors, the Trustee and the Collateral Agent may amend or supplement this Indenture and any Guarantee, the Notes, the Security Documents or the Intercreditor Agreement with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Section 6.04 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes); provided that no such amendment, supplement or waiver shall limit, reduce, subordinate, impair or otherwise adversely affect the Specific Exchange Notes Collateral existing as of the Issue Date or the Liens thereon securing the Notes without the written consent of the Holders of not less than 66 2/3% in aggregate principal amount of the outstanding Notes. Section 2.08 hereof and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.
-58-
Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture or amendment to the Security Documents or the Intercreditor Agreement, and upon the filing with the Trustee and the Collateral Agent of evidence satisfactory to the Trustee and the Collateral Agent of the consent of the Holders as aforesaid, and upon receipt by the Trustee and the Collateral Agent of the documents described in Section 7.02 hereof, the Trustee and the Collateral Agent shall join with the Issuer and the Guarantors in the execution of such amended or supplemental indenture or amendment to the Security Documents or the Intercreditor Agreement unless such amended or supplemental indenture directly affects the Trustee’s or the Collateral Agent’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee and the Collateral Agent may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture or amendment to the Security Documents or the Intercreditor Agreement.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall deliver to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to deliver such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.
Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not, with respect to any Notes held by a non-consenting Holder:
(1) change the Stated Maturity of any Note or of any installment of interest on any Note, or reduce the amount payable in respect of the principal thereof or the rate of interest thereon or any premium payable thereon, or reduce the amount that would be due and payable on acceleration of the maturity thereof, or change the place of payment where, or the coin or currency in which, any Note or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof, or change the date on which any Notes may be subject to redemption or reduce the redemption price therefor, or waive any provision of this Indenture with respect to the redemption of the Notes, or waive any redemption payment with respect to the Notes;
(2) reduce the percentage in aggregate principal amount of the outstanding Notes, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or of certain defaults thereunder and their consequences) provided for in this Indenture;
(3) modify or change any provision of this Indenture affecting the ranking of the Notes in a manner adverse to the Holders of the Notes;
(4) release all or substantially all of the Collateral;
-59-
(5) modify any of the provisions of this Indenture described in this Section 9.02 or provisions relating to waiver of defaults or certain covenants, except to increase any such percentage required for such actions or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each outstanding Note affected thereby;
(6) waive any Event of Default that has occurred pursuant to Sections 6.01(1) and (2);
(7) modify any of the preceding amendment or waiver provisions.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes shall be set forth in a supplemental indenture hereto that complies with the Trust Indenture Act as then in effect.
SECTION 9.04. Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.
SECTION 9.05. Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee and the Collateral Agent to Sign Amendments, etc.
(a) The Trustee and the Collateral Agent shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee or the Collateral Agent, as applicable. In executing any amendment, supplement or waiver, the Trustee and the Collateral Agent shall receive, and shall be fully protected in relying conclusively upon, in addition to the documents required by Section 12.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture, the Security Documents and the Intercreditor Agreement and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof.
-60-
(b) Notwithstanding Section 9.06(a), neither an Opinion of Counsel nor an Officer’s Certificate will be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this Indenture.
ARTICLE X
GUARANTEES
SECTION 10.01. Guarantee. Subject to this Article X, each of the Guarantors, as primary obligor and not merely as a surety, hereby, jointly and severally, irrevocably and unconditionally guarantees, on a senior secured basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee, the Collateral Agent and their respective successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the Obligations of the Issuer hereunder or thereunder, that (a) the principal of and interest and premium, if any, on the Notes shall be punctually paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuer to the Holders, the Trustee or the Collateral Agent hereunder or thereunder, including for expenses, indemnification or otherwise, shall be punctually paid in full, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, that same shall be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same promptly. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Notes). Each Guarantor hereby waives, to the fullest extent permitted by law, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by full payment of the obligations contained in the Notes and this Indenture or by release in accordance with the provisions of this Indenture.
Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee, the Collateral Agent or any Holder in enforcing any rights under this Section 10.01.
If any Holder, the Trustee or the Collateral Agent is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, then any amount paid either to the Trustee, the Collateral Agent or such Holder, as applicable, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.
-61-
Until terminated in accordance with Section 10.06 hereof, each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders, the Trustee and the Collateral Agent, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article VI hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any nonpaying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantees.
Each Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
In case any provision of any Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
The Guarantee issued by any Guarantor shall be a general senior obligation of such Guarantor, which shall be secured by Liens on the Collateral of such Guarantor and be pari passu in right of payment with all existing and future senior Debt of such Guarantor.
Each payment to be made by a Guarantor in respect of its Guarantee shall be made without setoff, counterclaim, reduction or diminution of any kind or nature.
SECTION 10.02. Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of the Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article X, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.
SECTION 10.03. Execution and Delivery. To evidence its Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that this Indenture (or a supplemental indenture in the form of Exhibit B) shall be executed on behalf of such Guarantor by one of its authorized Officers.
-62-
Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.
If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Guarantee of such Guarantor shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.
SECTION 10.04. Subrogation. Subject to the fifth paragraph of Section 10.01 and Section 10.02 hereof, each Guarantor shall be subrogated to all rights of Holders against the Issuer in respect of any amounts paid by any Guarantor pursuant to the provisions of Section 10.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.
SECTION 10.05. Benefits Acknowledged. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.
SECTION 10.06. Release of Guarantees. Each Guarantee by a Guarantor shall be automatically and unconditionally released and discharged and shall thereupon terminate and be of no further force and effect, and no further action by such Guarantor, the Issuer or the Trustee is required for the release of such Guarantor’s Guarantee:
(1) upon the discharge of the Notes in accordance with this Indenture or upon covenant defeasance or legal defeasance of the Notes pursuant to the Article VIII hereof;
(2) upon the merger, amalgamation, consolidation or division of such Guarantor with and into the Issuer or another Guarantor or upon the liquidation or winding up of such Guarantor, in each case, in compliance with or in a manner not prohibited by this Indenture;
(3) upon any direct or indirect sale, exchange, issuance, disposition or transfer (by merger, amalgamation, consolidation, dividend, distribution or otherwise) of (i) the Capital Interests of such Guarantor, after which the applicable Guarantor is no longer a Subsidiary or (ii) all or substantially all of the assets of such Guarantor (in each case, other than any sale, exchange or transfer or other disposition to the Issuer, any Guarantor and/or any Subsidiary), in each case, if such sale, exchange, issuance, disposition or transfer is made in compliance with or is not prohibited by the applicable provisions of this Indenture; or
(4) if such Guarantor no longer holds any Collateral upon a release of a security interest therein in accordance with Section 13.03 of this Indenture.
-63-
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge. This Indenture shall be discharged and shall cease to be of further effect as to all Notes, when:
(1) either (A) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or (B) all such Notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable or (ii) will become due and payable within one year or are to be called for redemption within one year under irrevocable arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of holders cash in U.S. dollars or U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest to the Stated Maturity or date of redemption;
(2) the Issuer has paid or caused to be paid all sums then due and payable under this Indenture by the Issuer;
(3) the Issuer has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at Stated Maturity or on the Redemption Date, as the case may be; and
(4) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel in form reasonably acceptable to the Trustee, each stating that all conditions precedent under this Indenture relating to the discharge of this Indenture and the Notes have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section 11.01, the provisions of Section 11.02 and Section 8.06 hereof shall survive such satisfaction and discharge.
SECTION 11.02. Application of Trust Money. Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee or another entity designated by it for such purposes pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee or another entity designated by it for such purposes; but such money need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Issuer has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.
-64-
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Trust Indenture Act Section 318(c), the imposed duties shall control.
SECTION 12.02. Notices. Any notice or communication by the Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile, electronic mail (in “.pdf” format) or overnight air courier guaranteeing next day delivery, to the others’ address:
If to the Issuer and/or any Guarantor:
Terra Property Trust, Inc.
205 West 28th Street, 12th Floor
New York, New York 10001
Attention: Vikram S. Uppal
Email: [email protected]
with a copy (which copy shall not constitute notice) to:
Alston & Bird LLP
90 Park Avenue
New York, NY 10016
Attention: Paul W. Hespel
Email: [email protected]
If to the Trustee or the Collateral Agent:
U.S. Bank Trust Company, National Association
US Bank, Global Corporate Trust, New York
100 Wall Street, 20th Floor
New York, NY 10005
Attention: Corporate Trust Administrator for Terra Property Trust, Inc.
The Issuer, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.
For so long as any Notes are represented by Global Notes, all notices to Holders of the Notes will be delivered to the Depositary in accordance with the Applicable Procedures . If any Notes are represented by Definitive Notes, the notices to Holders of such Notes will be validly given if mailed to them at their respective addresses in the Note Register maintained by the Registrar.
All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; on the first date on which publication is made or electronic delivery made; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee or the Collateral Agent shall be deemed effective upon actual receipt thereof.
-65-
Failure to deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed or otherwise delivered in the manner provided above within the time prescribed, such notice or communication shall be deemed duly given, whether or not the addressee receives it.
If the Issuer delivers or mails a notice or communication to Holders, it shall deliver or mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. Communication by Holders with Other Holders. Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer or any of the Guarantors to the Trustee or the Collateral Agent to take any action under this Indenture (other than as set forth in Section 9.06(b) hereof), the Security Documents or the Intercreditor Agreement, as applicable, the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee or the Collateral Agent, as applicable:
(A) An Officer’s Certificate in form reasonably satisfactory to the Trustee or the Collateral Agent, as applicable (which shall include the statements set forth in Section 12.05 hereof), stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture, the Security Documents and the Intercreditor Agreement, as applicable, relating to the proposed action have been satisfied; and
(B) An Opinion of Counsel in form reasonably satisfactory to the Trustee or the Collateral Agent, as applicable (which shall include the statements set forth in Section 12.05 hereof), stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.
SECTION 12.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture, the Security Documents or the Intercreditor Agreement, as applicable, shall include:
(A) a statement that the Person making such certificate or opinion has read such covenant or condition;
(B) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(C) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and
(D) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with; provided, however, that with respect to matters of fact, an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.
-66-
SECTION 12.06. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar, Transfer Agent and Paying Agent may make reasonable rules and set reasonable requirements for their respective functions.
SECTION 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders. No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their parent companies or Subsidiaries (other than the Issuer, the Guarantors, and any Subsidiaries that have granted Liens in favor of the Notes) shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, the Guarantees, this Indenture, any supplemental indenture or any Security Document or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
SECTION 12.08. Governing Law. THIS INDENTURE, THE NOTES, ANY GUARANTEE, THE SECURITY DOCUMENTS AND THE INTERCREDITOR AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 12.09. Waiver of Jury Trial. EACH OF THE ISSUER, THE GUARANTORS, THE TRUSTEE AND EACH OTHER PARTY HERETO HEREBY, AND THE HOLDERS BY THEIR ACCEPTANCE OF THE NOTES THEREBY, IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.10. Force Majeure. In no event shall the Trustee or the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, pandemics, epidemics, recognized public emergencies, quarantine restrictions, nuclear or natural catastrophes or acts of God and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services, and hacking, cyber-attacks, or other use or infiltration of the Trustee’s or Collateral Agent’s technological infrastructure exceeding authorized access; it being understood that the Trustee and Collateral Agent shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
SECTION 12.11. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.12. Successors. All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee and the Collateral Agent in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.06 hereof.
SECTION 12.13. Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
-67-
SECTION 12.14. Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. This Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Indenture or any document to be signed in connection with this Indenture (other than the Notes) shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
SECTION 12.15. Table of Contents, Headings, etc. The Table of Contents, the Reconciliation and tie and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 12.16. USA PATRIOT Act. The parties hereto acknowledge that in order to help the government fight the funding of terrorism and money laundering activities, Section 326 of the USA PATRIOT Act and 31 C.F.R. § 1010.230 require all financial institutions to obtain, verify, and record information that identifies each Person establishing a relationship or opening an account with U.S. Bank Trust Company, National Association. The parties hereto agree that they will provide the Trustee and the Collateral Agent with name, address, tax identification number, if applicable, and other information that will allow the Trustee and the Collateral Agent to identify the individual or entity who is establishing the relationship, and will further provide the Trustee and the Collateral Agent with formation documents such as articles of incorporation or other identifying documents.
ARTICLE XIII
COLLATERAL
SECTION 13.01. The Collateral.
(a) The due and punctual payment of the principal of, premium, if any, and interest on the Notes and the Guarantees when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, interest on the overdue principal of and interest (to the extent permitted by law), if any, on the Notes and the Guarantees and performance of all other obligations of the Issuer and the Guarantors under this Indenture, and the Notes and the Security Documents, shall be secured by first-priority Liens and security interests, subject to Liens permitted or not prohibited by the Security Documents which the Issuer and the Guarantors, as the case may be, have entered into simultaneously with the execution of this Indenture and will be secured pursuant to all Security Documents hereafter delivered as required or permitted by this Indenture, the Security Documents and the Intercreditor Agreement.
(b) The Issuer and the Guarantors hereby agree that the Collateral Agent shall hold the Collateral in trust for its benefit and for the benefit of all of the Holders and the Trustee and the Collateral Agent, in each case pursuant to the terms of the Security Documents and the Intercreditor Agreement, and the Collateral Agent is hereby authorized to execute and deliver the Security Documents and the Intercreditor Agreement.
-68-
(c) Each Holder, by its acceptance of any Notes, consents and agrees to the terms of Section 13.05 hereof, the Security Documents and the Intercreditor Agreement (including the provisions providing for foreclosure) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and directs the Collateral Agent to perform its obligations and exercise its rights under the Security Documents and the Intercreditor Agreement in accordance therewith.
(d) The Collateral Agent, the Trustee and each Holder, by accepting the Notes and the Guarantees, acknowledges that, as more fully set forth in the Security Documents and the Intercreditor Agreement, the Collateral as now or hereafter constituted shall be held for the benefit of all the Holders, the Collateral Agent and the Trustee, and that the Lien of this Indenture and the Security Documents in respect of the Collateral Agent, the Trustee and the Holders is subject to and qualified and limited in all respects by the Security Documents and the Intercreditor Agreement and actions that may be taken thereunder.
SECTION 13.02. Further Assurances. Subject to the limitations set forth in the Security Documents, the Issuer and each of the Guarantors will, and the Issuer will cause each of its direct and indirect subsidiaries and Affiliates to, execute, deliver and file, if applicable, any and all further documents, financing statements, agreements and instruments, and take all further action that may be reasonably required under applicable law (including the filing of continuation financing statements and amendments to financing statements), or that the Collateral Agent may reasonably request (there being no obligation whatsoever for the Collateral Agent to make any such request), in order to grant, preserve, protect and perfect the validity and priority of the security interests and Liens created or intended to be created by the Security Documents in the Collateral.
SECTION 13.03. Release of Collateral.
(a) Subject to, among other things, Section 9.01(13), the Issuer and the Guarantors will be entitled to the release of property and other assets included in the Collateral from the Liens securing the Notes and the Guarantees under any one or more of the following circumstances (for the avoidance of doubt and notwithstanding anything to the contrary contained herein, as stated in the definition of “Specific Exchange Notes Collateral”, the Liens granted in favor of the Collateral Agent for the benefit of the Notes Secured Parties on the Specific Exchange Notes Collateral and any proceeds in respect thereof shall not be subject to release, subordination or termination, except as set forth in clause (4) below, without the prior written consent of the Holders of 66 2/3% of the aggregate principal amount of the Notes then outstanding):
(1) in whole, upon a satisfaction and discharge pursuant to Section 11.01 hereof or a legal defeasance or covenant defeasance pursuant to Article VIII hereof;
(2) in whole or in part, with the consent of the requisite Holders in accordance with Section 9.02 hereof, including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes;
(3) in accordance with the Intercreditor Agreement, solely as to the Shared Collateral; and
(4) upon a sale or other disposition of the Specific Exchange Notes Collateral and the application of the Net Cash Proceeds of such sale or other disposition in accordance with the terms of this Indenture.
(b) [Reserved].
(c) [Reserved].
(d) [Reserved].
-69-
(e) To the extent the Collateral Agent is required or requested to take any action to effect the release of any Collateral, the Issuer and each Guarantor will furnish to the Collateral Agent, prior to each proposed release of Collateral pursuant to the Security Documents and this Indenture;
(i) an Officer’s Certificate requesting such release, including a statement to the effect that all conditions precedent provided for in this Indenture and the Security Documents to such release and the action being requested have been complied with including the delivery to the Collateral Agent of all documents required under this Section 13.03(e);
(ii) a form of such release requested to be executed and delivered by the Collateral Agent (if applicable); and
(iii) all documents (if any) expressly required by this Indenture, the Security Documents and the Intercreditor Agreement.
Upon compliance by the Issuer or the Guarantors, as the case may be, with the conditions precedent set forth above and in the Security Documents and delivery to the Trustee and the Collateral Agent of an Officer’s Certificate and an Opinion of Counsel, satisfactory to each of them, that all conditions precedent required by this Indenture and the Security Documents have been complied with, the Trustee or the Collateral Agent, as applicable, shall promptly take actions reasonably requested in writing by the Issuer or the Guarantor to cause the released Collateral to be released and reconveyed to the Issuer or the applicable Guarantor.
(f) The release of any Collateral in accordance with the terms of this Indenture and the Security Documents shall not be deemed to impair the security under this Indenture on any remaining Collateral or affect the Lien of this Indenture or the Security Documents on any remaining Collateral pursuant to this Indenture, the Security Documents or the Intercreditor Agreement.
SECTION 13.04. Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Security Documents.
(a) Subject to the provisions of the Security Documents and the Intercreditor Agreement, each of the Trustee or the Collateral Agent may (but shall not be obligated to), in its sole discretion and without the consent of the Holders, on behalf of the Holders, take all actions it deems necessary or appropriate in order to (a) enforce any of its rights or any of the rights of the Holders under the Security Documents and the Intercreditor Agreement and (b) collect and receive any and all amounts payable in respect of the Collateral in respect of the obligations of the Issuer and the Subsidiaries hereunder and thereunder. Subject to the provisions of the Security Documents and the Intercreditor Agreement, the Trustee or the Collateral Agent shall have the power, but not the obligation, to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Security Documents, the Intercreditor Agreement or this Indenture, and such suits and proceedings as the Trustee or the Collateral Agent may deem expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders, the Collateral Agent or the Trustee).
-70-
(b) The Trustee or the Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral or to ensure that the Collateral is cared for, protected, insured or has properly been encumbered (other than the exercise of reasonable care in the custody and preservation of the Collateral in its possession). Neither the Trustee nor the Collateral Agent shall have responsibility for recording, filing, re-recording or refiling any financing statement, continuation statement, document, instrument or other notice in any public office at any time or times or to otherwise take any action to perfect or maintain the perfection of any security interest granted to it under the Security Documents or otherwise. The Trustee or the Collateral Agent, as applicable, shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee or the Collateral Agent, as applicable, in good faith.
(c) Where any provision of this Indenture requires that any action be taken to perfect the security interest in any Collateral, the Issuer and the relevant Guarantor shall deliver to the Trustee or the Collateral Agent the following:
(i) written notice from the Issuer of such Collateral;
(ii) the form of instrument adding such Collateral, which, based on the type and location of the property subject thereto, shall be in substantially the form of the applicable Security Documents entered into on the date of this Indenture, with such changes thereto as the Issuer shall consider appropriate, or in such other form as the Issuer shall deem proper; provided that any such changes or such form are administratively satisfactory to the Trustee or the Collateral Agent; and
(iii) such financing statements, if any, as the Issuer shall deem necessary to perfect the Collateral Agent’s security interest in such Collateral.
(d) Upon receipt of the foregoing, the Collateral Agent shall, upon being provided with an Officer’s Certificate and Opinion of Counsel in form and substance reasonably satisfactory to the Collateral Agent, execute and enter into or authorize the filing of any such instrument; provided that in no event shall the Collateral Agent be required to enter into any such instrument that it determines adversely affects the rights, immunities, privileges or indemnities of the Collateral Agent hereunder in a commercially unreasonable manner.
(e) Notwithstanding the foregoing, and except as may be required by Sections 13.04(d) and 13.09, neither an Opinion of Counsel nor an Officer’s Certificate shall be required in connection with the filing by the Issuer (or an agent that has agreed to do so on behalf of the Issuer) of UCC financing statements or the joinder of any new Guarantor to the Intercreditor Agreement.
SECTION 13.05. Appointment and Authorization of U.S. Bank Trust Company, National Association as Collateral Agent.
(a) U.S. Bank Trust Company, National Association is hereby designated and appointed as the Collateral Agent under the Security Documents, and is authorized as the Collateral Agent to execute and enter into each of the Security Documents and the Intercreditor Agreement (including joinders thereto) and (i) to take action and exercise such powers as are expressly required or permitted hereunder and under the Security Documents and the Intercreditor Agreement and (ii) to exercise such powers and perform such duties as are in each case, expressly delegated to the Collateral Agent by the terms hereof and thereof together with such other powers as are reasonably incidental hereto and thereto. The Collateral Agent agrees to act as such on the conditions contained in this Section 13.05. The Collateral Agent shall have the privileges, powers, indemnities and immunities set forth herein and in the Security Documents in acting as such. Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Security Documents or the Intercreditor Agreement, the duties of the Collateral Agent shall be ministerial and administrative in nature, and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein and in the Security Documents and the Intercreditor Agreement to which the Collateral Agent is a party, nor shall the Collateral Agent have or be deemed to have any trust or other fiduciary relationship with the Trustee, any Holder, the Issuer or any Guarantor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture, the Security Documents or the Intercreditor Agreement or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. Neither the Collateral Agent nor any of its officers, directors, employees or agents shall be responsible for any act or failure to act hereunder, except for its own gross negligence or willful misconduct.
-71-
(b) The Collateral Agent shall incur no liability to anyone in acting upon any signature, instrument, statement, notice, resolution, request, direction, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and reasonably believed by it to be signed by the proper party or parties. The Collateral Agent may exercise any of its rights or powers hereunder or perform any of its duties hereunder either directly or by or through agents or attorneys, and the Collateral Agent shall not be responsible for any willful misconduct or gross negligence on the part of any agent or attorney appointed hereunder with due care by it. Anything in this Indenture or Security Documents notwithstanding, in no event shall the Collateral Agent be liable for special, indirect or consequential damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Agent has been advised of such loss or damage and regardless of the form of action.
(c) The Collateral Agent shall be fully justified in failing or refusing to take any action under this Indenture, the Security Documents or the Intercreditor Agreement unless it shall first receive such advice or concurrence of the Trustee or the Holders of a majority in aggregate principal amount of the Notes as it determines and, if it so requests, it shall first be indemnified to its satisfaction by the Holders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Except as otherwise provided in the Security Documents, the Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Indenture, the Security Documents or the Intercreditor Agreement in accordance with a request, direction, instruction or consent of the Trustee or the Holders of a majority in aggregate principal amount of the then outstanding Notes and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Holders.
(d) The Collateral Agent shall be entitled to all the rights, protections, indemnifications, and immunities granted to the Trustee and/or the Collateral Agent under this Indenture and the Security Documents and to the benefit of every provision of the Indenture (including, without limitation, Article VII thereof) and the Security Documents relating to the conduct or affecting the liability of or affording protection to the Trustee and/or the Collateral Agent, including its right to be compensated, reimbursed and indemnified, whether or not elsewhere so provided.
SECTION 13.06. Collateral Accounts.
(a) The Trustee and the Collateral Agent are authorized to receive any funds for the benefit of the Holders distributed under, and in accordance with, the Security Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture, the Security Documents and the Intercreditor Agreement.
-72-
SECTION 13.07. Resignation of Collateral Agent.
(a) The Collateral Agent may resign at any time by notice to the Trustee and the Issuer, such resignation to be effective upon the acceptance of a successor agent to its appointment as Collateral Agent. If the Collateral Agent resigns under this Indenture, the Issuer shall appoint a successor collateral agent. If no successor collateral agent is appointed prior to the intended effective date of the resignation of the Collateral Agent (as stated in the notice of resignation), the Issuer shall appoint a successor collateral agent. If no successor collateral agent is appointed pursuant to the preceding sentence within 45 days after the intended effective date of resignation (as stated in the notice of resignation) the Collateral Agent shall, at the expense of the Issuer, be entitled to petition a court of competent jurisdiction to appoint a successor. Upon the acceptance of its appointment as successor collateral agent hereunder, such successor collateral agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent, and the term “Collateral Agent” shall mean such successor collateral agent, and the retiring Collateral Agent’s appointment, powers and duties as the Collateral Agent shall be terminated. After the retiring Collateral Agent’s resignation hereunder, the provisions of this Article XIII shall continue to inure to its benefit and the retiring Collateral Agent shall not by reason of such resignation be deemed to be released from liability as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Indenture.
SECTION 13.08. [Reserved].
SECTION 13.09. Recordings.
(a) [Reserved].
(b) To the extent applicable, the Issuer shall cause Trust Indenture Act Section 313(b)(1), relating to reports, and Trust Indenture Act Section 314(d), relating to the release of property or securities subject to the Lien of the Security Documents, to be complied with.
(c) Any release of Collateral permitted by Section 13.03 shall be deemed not to impair the Liens under this Indenture, the Security Agreement and the other Security Documents in contravention thereof. Any certificate or opinion required under Trust Indenture Act Section 314(d) may be made by an officer or legal counsel, as applicable, of the Issuer except in cases where Trust Indenture Act Section 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Issuer.
[Signatures on following page]
-73-
| TERRA PROPERTY TRUST, INC. | ||
| By: | /s/ Gregory Pinkus | |
| Name: | Gregory Pinkus | |
| Title: | Chief Financial Officer | |
[Signature Page to Indenture]
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and as Collateral Agent | ||
| By: | /s/ Shannon Matthews | |
| Name: | Shannon Matthews | |
| Title: | Vice President | |
[Signature Page to Indenture]
EXHIBIT A
[Form of Face of Note]
[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]
CUSIP: [ ]
ISIN: [ ]
NOTE
representing up to $[ ]
11.00% Senior Secured Notes due 2027
| No. [ ] | $[ ] |
TERRA PROPERTY TRUST, INC.
promises to pay to [ ] or registered assigns,
[the principal sum set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] [the principal sum of $[ ] on July 1, 2027].
Interest Payment Dates: The last day of each calendar month, beginning July 31, 2026.
Record Dates: The fifteenth (15th) calendar day of each month immediately preceding the applicable interest payment date.
A-1
IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed.
| TERRA PROPERTY TRUST, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Indenture]
A-2
This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee
| By: | |||
| Title: | Authorized Signatory | ||
| Dated: | |||
[Signature Page to Indenture]
A-3
[Back of Note]
11.00% Senior Secured Notes due 2027
Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Terra Property Trust, Inc. (the “Issuer”), promises to pay interest on the principal amount of this Note at a rate per annum of 11.00% from June 30, 2026 until maturity. The Issuer will pay interest on this Note monthly in arrears on the last day of each calendar month, beginning July 31, 2026 or, if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). The Issuer will make each interest payment to the Holder of record of this Note on the fifteenth (15th) calendar day of each month immediately preceding the applicable Interest Payment Date (each, a “Record Date”). Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that the first Interest Payment Date shall be July 31, 2026. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate borne by this Note; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the rate borne by this Note. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Issuer will pay interest on this Note to the Person who is the registered Holder of this Note at the close of business on the Record Date (whether or not a Business Day) next preceding the Interest Payment Date, even if this Note is cancelled after such Record Date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payments of principal of, premium, if any, and interest on the Notes will be payable at the office or agency of one or more Paying Agents maintained by the Issuer pursuant to the Indenture or, at the option of the Issuer, may be made by check mailed to the Holders at their addresses set forth in the Note Register, provided that (a) all payments of principal, premium, if any, and interest on, Notes represented by Global Notes registered in the name of or held by the Depositary or a nominee of the Depositary, as the case may be, or any successor depository will be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof, and (b) all payments of principal, interest and premium, if any, on the Definitive Notes will be made by wire transfer to an account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Such payment shall be in Dollars. If a payment date is not a Business Day, payment will be made on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.
3. PAYING AGENT, TRANSFER AGENT AND REGISTRAR. Initially, U.S. Bank Trust Company, National Association will act as the Paying Agent, Registrar and Transfer Agent. The Issuer may change any Paying Agent, Registrar or Transfer Agent without prior notice to any Holder. The Issuer or any of its Subsidiaries may act in any such capacity.
A-4
4. INDENTURE. The Issuer issued the Notes, including this Note, under an Indenture, dated as of June 30, 2026 (the “Indenture”), among Terra Property Trust, Inc., the Trustee and Collateral Agent. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the “Trust Indenture Act”). The Notes are subject to all such terms and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) The Notes may be redeemed in whole or in part at any time or from time to time at the Issuer’s option prior to the Stated Maturity, upon not less than 10 days nor more than 60 days written notice prior to the Redemption Date, at a redemption price of 102% of the outstanding principal amount of the Notes to be redeemed plus accrued and unpaid interest otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the Redemption Date.
(b) Notwithstanding anything to the contrary set forth in Section 3.07 of the Indenture, in connection with any tender offer for the Notes, if Holders of not less than 90% in aggregate principal amount of the then outstanding Notes validly tender and do not validly withdraw such Notes in such offer and the Issuer, or any third party making such offer in lieu of the Issuer, purchases all of the Notes validly tendered and not validly withdrawn by such Holders, the Issuer or such third party will have the right upon not less than 10 nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s registered address or sent electronically in accordance with the procedures of DTC for global book-entry Notes (with a copy to the Trustee) and given not more than 60 days following such purchase date, to redeem all Notes that remain outstanding following such purchase at a price equal to the price offered to each other Holder in such offer (which may be less than par and excluding any early tender or incentive fee in such offer) plus, to the extent not included in the offer payment, accrued and unpaid interest, if any, thereon, to, but excluding, the Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date falling prior to or on the Redemption Date.
(c) Any redemption pursuant to Section 3.07 of the Indenture shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.
6. MANDATORY REDEMPTION; OFFERS TO PURCHASE.
(a) Asset Sales.
(i) Upon the occurrence of any Specified Asset Sale by the Issuer or any of its subsidiaries, the Issuer shall, upon written notice to the holders of the Notes (with a copy to the Trustee) not less than five Business Days prior to the redemption date, redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Specified Asset Sale at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption, with such mandatory redemption to be made not later than the 10th Business Day following the receipt of such Net Cash Proceeds.
A-5
(ii) Upon the occurrence of any Asset Sale that does not constitute a Specified Asset Sale by the Issuer or any of its subsidiaries in any fiscal quarter (starting with the fiscal quarter ending September 30, 2026), the Issuer shall redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Asset Sale at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption; provided that the Issuer or its subsidiaries (as applicable) may, in lieu of making such redemption, at their option by written notice to the holders of the Notes (with a copy to the Trustee) on or prior to the third Business Day after the delivery of financial statements for the fiscal quarter in which such Asset Sale was consummated, reinvest such Net Cash Proceeds in assets that are used in the operation of the business of the Issuer or its subsidiaries (as applicable) so long as (x) the Issuer or such subsidiary shall have entered into a definitive agreement for the purchase of assets or property within 120 days following the receipt of such Net Cash Proceeds and (y) within 60 days following the end of such 120 day period, consummate the purchase of such assets, with the amount of such Net Cash Proceeds unused after such period to be applied as set forth under Section 3.08(a)(ii) of the Indenture. Written notice of any mandatory redemption of the Notes as set forth under Section 3.08(a)(ii) of the Indenture, together with the proceeds of any Asset Sale that does not constitute a Specified Asset Sale consummated in any fiscal quarter shall be provided to the holders of the Notes (with a copy to the Trustee) not later than the tenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter with the SEC, with such mandatory redemption to be made not later than the fifteenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter.
(b) Extraordinary Receipts. Upon the receipt of any Extraordinary Receipts by the Issuer or any of its subsidiaries in any fiscal quarter (starting with the fiscal quarter ending September 30, 2026), the Issuer shall redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Extraordinary Receipts at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption; provided that the Issuer or its subsidiaries (as applicable) may, in lieu of making such redemption, at their option by written notice to the holders of the notes (with a copy to the Trustee) on or prior to the third Business Day after the delivery of financial statements for the fiscal quarter in which such Extraordinary Receipts were received, reinvest such Net Cash Proceeds in assets that are used in the operation of the business of the Issuer or its subsidiaries (as applicable) so long as (x) the Issuer or such subsidiary shall have entered into a definitive agreement for the purchase of assets or property within 120 days following the receipt of such Net Cash Proceeds and (y) within 60 days following the end of such 120 day period, consummate the purchase of such assets, with the amount of such Net Cash Proceeds unused after such period to be applied as set forth under Section 3.08(b) of the Indenture. Written notice of any mandatory redemption of the Notes as set forth under Section 3.08(b) of the Indenture, together with the proceeds of any Extraordinary Receipts received in any fiscal quarter, shall be provided to the holders of the Notes (with a copy to the Trustee) not later than the tenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter with the SEC, with such mandatory redemption to be made not later than the fifteenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter.
(c) Incurrence of Structurally Senior Debt. Upon the Incurrence by the Issuer or any of its subsidiaries of any Structurally Senior Debt, the Issuer shall, upon written notice to the holders of the Notes (with a copy to the Trustee) not less than ten Business Days nor more than 20 Business Days written notice prior to the redemption date, redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds received by the Issuer or such subsidiary in connection therewith, at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption.
A-6
(d) Excess Cash Flow. For each fiscal quarter of the Issuer and its subsidiaries (commencing with the fiscal quarter ending September 30, 2026), the Issuer shall, upon written notice to the holders of the Notes (with a copy to the Trustee), redeem an outstanding principal amount of the Notes in an amount equal to 50% of Excess Cash Flow of the Issuer and its subsidiaries for such fiscal quarter, at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption. Written notice of any mandatory redemption of the Notes as set forth under Section 3.08(d) of the Indenture, together with a calculation of Excess Cash Flow for such fiscal quarter, shall be provided to the holders of the Notes (with a copy to the Trustee) not later than the tenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter with the SEC, with such mandatory redemption to be made not later than the fifteenth Business Day after the date on which the Issuer has filed its quarterly financial statements for such fiscal quarter.
(e) Specific Exchange Notes Collateral Repayments. Upon the receipt of any Specific Exchange Notes Collateral Repayment by the Issuer or any of its subsidiaries, the Issuer shall, upon written notice to the holders of the Notes (with a copy to the Trustee) not less than five Business Days prior to the redemption date, redeem an outstanding principal amount of the Notes in an amount equal to 100% of the Net Cash Proceeds in excess of the Excess Proceeds Threshold received by such Person in connection with such Specific Exchange Notes Collateral Repayment at a redemption price equal to 102% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest payments otherwise payable thereon for the then-current monthly interest period accrued to, but excluding, the date fixed for redemption, with such mandatory redemption to be made not later than the tenth Business Day following receipt of such Net Cash Proceeds.
(f) Any redemption pursuant to Section 3.08 of the Indenture shall be made pursuant to the provisions of Sections 3.01 through 3.06 thereof; provided that, notwithstanding anything to the contrary in Section 3.03 of the Indenture, the notice periods and redemption timing set forth in Section 3.08 of the Indenture shall govern with respect to any mandatory redemption required hereunder.
(g) Except as set forth in Section 3.08 of the Indenture, the Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to, or offer to purchase, any of the Notes.
7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, the Issuer shall deliver electronically, mail or cause to be mailed by first-class mail notices of redemption at least 10 days but not more than 60 days before the Redemption Date to each Holder to be redeemed at such Holder’s registered address or otherwise in accordance with Applicable Procedures, except that redemption notices may be mailed or delivered more than 60 days prior to a Redemption Date if the notice is (a) issued in connection with Article VIII or Article XI of the Indenture or (b) subject to one or more conditions precedent and such Redemption Date is delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion).
8. [RESERVED].
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $25.00 and any integral multiple of $25.00 in excess of $25.00. The transfer of Notes shall be registered and Notes may only be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not issue, exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not issue, exchange or register the transfer of any Notes during the period of 15 days before the mailing of a notice of redemption of Notes to be redeemed or between a Record Date with respect to such Note and the next succeeding Interest Payment Date with respect to such Note.
A-7
10. PERSONS DEEMED OWNERS. The registered Holder shall be treated as its owner for all purposes. Only registered Holders shall have rights hereunder.
11. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees, the Notes, the Security Documents or the Intercreditor Agreement may be amended or supplemented as provided in the Indenture.
12. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25.0% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Issuer, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes, the Guarantees or the Security Documents except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder. The Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required within twenty (20) Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default and what action the Issuer is taking or proposes to take with respect thereto.
13. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.
14. Security. This Note will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture, the Security Documents and the Intercreditor Agreement. The Collateral Agent holds the Collateral in trust for the benefit of the Trustee, the Holders and the Collateral Agent pursuant to the Security Documents and the Intercreditor Agreement. Each Holder, by accepting this Note, consents and agrees to the terms of the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the Intercreditor Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement, and to perform its obligations and exercise its rights thereunder in accordance therewith.
A-8
15. GOVERNING LAW. THE INDENTURE, THIS NOTE, ANY GUARANTEE, THE SECURITY DOCUMENTS AND THE INTERCREDITOR AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. [RESERVED].
17. CUSIP AND ISIN NUMBERS. The Issuer in issuing the Notes may use CUSIP and ISIN numbers (if then generally in use) and, if so, the Issuer shall use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:
Terra Property Trust, Inc.
205 West 28th Street, 12th Floor
New York, New York 10001
Attention: Vikram S. Uppal
A-9
Assignment form
To assign this Note, fill in the form below.
| (I) or (we) assign and transfer this Note to: | (Insert assignee’s legal name) |
| (Insert assignee’s soc. sec. or tax I.D. no.) | |
| (Print or type assignee’s name, address and zip code) | |
and irrevocably appoint __________________________ to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
| Date: |
| Your Signature: | ||
| (Sign exactly as your name appears on the face of this Note) |
| Signature Guarantee*: |
| * | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
A-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The initial outstanding principal amount of this Global Note is $ . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
| Date of Exchange | Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal Amount of this Global Note following such decrease or increase |
Signature of authorized signatory of Trustee or Notes Custodian |
| * | This schedule should be included only if the Note is issued in global form. |
A-11
EXHIBIT B
FORM OF SUPPLEMENTAL
INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this “Supplemental Indenture”), dated as of [ ], among [ ] (the “Guaranteeing Subsidiary”), a Subsidiary of Terra Property Trust, Inc., a Maryland corporation (the “Issuer”), and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) and as collateral agent (the “Collateral Agent”).
W I T N E S S E T H
WHEREAS, the Issuer and the Guarantors have heretofore executed and delivered to the Trustee and the Collateral Agent an Indenture, dated as of June 30, 2026 (the “Indenture”), providing for the issuance of an unlimited aggregate principal amount of 11.00% Senior Secured Notes due 2027 (the “Notes”);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “Guarantee”); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee and the Collateral Agent are authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
(1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
(2) Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture including, but not limited to, Article X thereof.
(3) No Recourse Against Others. No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their parent companies or Subsidiaries (other than the Issuer and the Guarantors) shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, the Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
(4) Governing Law. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(5) Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. This Supplemental Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
B-1
(6) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
(7) The Trustee and the Collateral Agent. Neither the Trustee nor the Collateral Agent shall be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary. The Trustee and the Collateral Agent shall be entitled to all the rights, protections, indemnifications, and immunities granted to the Trustee and the Collateral Agent under the Indenture and the Security Documents and to the benefit of every provision of the Indenture (including, without limitation, Article VII thereof) and the Security Documents relating to the conduct or affecting the liability of or affording protection to the Trustee and/or the Collateral Agent, including its right to be compensated, reimbursed and indemnified, whether or not elsewhere herein so provided.
(8) Successors. All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its successors, except as otherwise provided in this Supplemental Indenture. All agreements of the Trustee and the Collateral Agent in this Supplemental Indenture shall bind its successors.
B-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.
| [GUARANTEEING SUBSIDIARY] | |||
| By: | |||
| Name: | |||
| Title: | |||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and Collateral Agent | |||
| By: | |||
| Name: | |||
| Title: | |||
B-3
EXHIBIT C
FORM OF INTERCREDITOR AGREEMENT
(see attached)
C-1
Exhibit 10.1
Execution Version
TERM LOAN AGREEMENT
dated as of June 29, 2026
by and among
SUBSIDIARY HOLDINGS
II, LLC,
as the Borrower,
STRATEGIC YIELDCO
LLC,
as the Lender,
and
ALTER DOMUS (US)
LLC,
as Administrative Agent and Collateral Agent
TABLE OF CONTENTS
| Page | ||
| Section 1. | DEFINITIONS AND INTERPRETATION | 1 |
| 1.1 | Definitions | 1 |
| 1.2 | Accounting Terms | 20 |
| 1.3 | Interpretation, etc. | 21 |
| 1.4 | Certifications | 21 |
| 1.5 | Divisions and Other Transactions | 21 |
| Section 2. | LOANS | 21 |
| 2.1 | Term Loans | 21 |
| 2.2 | Availability of Funds | 22 |
| 2.3 | Use of Proceeds | 22 |
| 2.4 | Evidence of Debt; Register; Notes | 22 |
| 2.5 | Interest on Loans | 23 |
| 2.6 | Default Interest | 23 |
| 2.7 | Fees | 24 |
| 2.8 | Scheduled Payments | 24 |
| 2.9 | Prepayments | 24 |
| 2.10 | Application of Prepayments | 25 |
| 2.11 | General Provisions Regarding Payments | 25 |
| 2.12 | [Reserved] | 26 |
| 2.13 | Increased Costs; Capital Adequacy | 26 |
| 2.14 | Taxes; Withholding, etc. | 27 |
| 2.15 | Obligation to Mitigate | 31 |
| 2.16 | No Extension of Maturity Date | 31 |
| 2.17 | [Reserved] | 31 |
| Section 3. | CONDITIONS PRECEDENT | 31 |
| 3.1 | Effective Date | 31 |
| 3.2 | Conditions to Funding Term Loans on the Closing Date | 33 |
| Section 4. | REPRESENTATIONS AND WARRANTIES | 34 |
| 4.1 | Organization; Requisite Power and Authority; Qualification | 34 |
| 4.2 | Due Authorization | 34 |
| 4.3 | No Conflict; Government Consents | 35 |
| 4.4 | Binding Obligation | 35 |
| 4.5 | Historical Financial Statements | 35 |
| 4.6 | No Material Adverse Effect | 35 |
| 4.7 | Adverse Proceedings | 35 |
| 4.8 | Payment of Taxes | 36 |
| 4.9 | Ownership of Assets | 36 |
i
| 4.10 | Governmental Regulation | 36 |
| 4.11 | Margin Stock | 36 |
| 4.12 | ERISA | 36 |
| 4.13 | Solvency | 36 |
| 4.14 | Compliance with Laws | 37 |
| 4.15 | Disclosure | 38 |
| 4.16 | Perfection of Security Interests in the Collateral | 38 |
| 4.17 | Use of Proceeds | 38 |
| 4.18 | No Default | 38 |
| 4.19 | Fiscal Year | 38 |
| Section 5. | AFFIRMATIVE COVENANTS | 38 |
| 5.1 | Financial Statements; Notices and Other Reports | 38 |
| 5.2 | Existence | 40 |
| 5.3 | Payment of Taxes and Claims | 40 |
| 5.4 | Maintenance of Properties | 41 |
| 5.5 | Insurance | 41 |
| 5.6 | Books and Records; Inspections | 41 |
| 5.7 | Compliance with Laws | 41 |
| 5.8 | Anti-Terrorism Laws and Anti-Corruption Laws | 41 |
| 5.9 | Further Assurances | 41 |
| 5.10 | Use of Proceeds | 41 |
| 5.11 | Collateral Account | 41 |
| 5.12 | Bankruptcy Remoteness | 42 |
| 5.13 | Post-Closing Matters | 43 |
| Section 6. | NEGATIVE COVENANTS | 43 |
| 6.1 | Indebtedness | 43 |
| 6.2 | Liens | 43 |
| 6.3 | No Further Negative Pledges | 43 |
| 6.4 | Distributions | 43 |
| 6.5 | Investments | 44 |
| 6.6 | Fundamental Changes; Disposition of Assets | 44 |
| 6.7 | Business Activities | 44 |
| 6.8 | Organizational Documents | 44 |
| 6.9 | Fiscal Year | 44 |
| 6.10 | ERISA Compliance | 44 |
| 6.11 | Holding Company Covenant with respect to Holdings | 45 |
| Section 7. | EVENTS OF DEFAULT | 45 |
| 7.1 | Events of Default | 45 |
| 7.2 | Remedies upon an Event of Default | 47 |
| 7.3 | Application of Proceeds | 47 |
ii
| Section 8. | AGENTS | 48 |
| 8.1 | Appointment and Duties | 48 |
| 8.2 | Binding Effect | 50 |
| 8.3 | Use of Discretion | 50 |
| 8.4 | Delegation of Rights and Duties | 51 |
| 8.5 | Reliance and Liability | 51 |
| 8.6 | Agents and Lead Arranger Individually | 55 |
| 8.7 | Expenses; Indemnities; Withholding | 55 |
| 8.8 | Resignation or Removal of Agent | 56 |
| 8.9 | Release of Collateral | 57 |
| 8.10 | Administrative Agent May File Bankruptcy Disclosure and Proofs of Claim | 58 |
| 8.11 | Certain ERISA Matters | 59 |
| Section 9. | MISCELLANEOUS | 61 |
| 9.1 | Notices | 61 |
| 9.2 | Expenses | 63 |
| 9.3 | Indemnity; Certain Waivers | 64 |
| 9.4 | Set-Off | 65 |
| 9.5 | Amendments and Waivers | 65 |
| 9.6 | Successors and Assigns; Participations | 65 |
| 9.7 | Independence of Covenants; Interpretation | 68 |
| 9.8 | Survival of Representations, Warranties and Agreements | 69 |
| 9.9 | No Waiver; Remedies Cumulative | 69 |
| 9.10 | Marshalling; Payments Set Aside | 69 |
| 9.11 | Severability | 69 |
| 9.12 | Obligations of the Lender | 69 |
| 9.13 | Headings | 70 |
| 9.14 | Applicable Law | 70 |
| 9.15 | Consent to Service of Process and Jurisdiction | 70 |
| 9.16 | WAIVER OF JURY TRIAL | 70 |
| 9.17 | Confidentiality | 71 |
| 9.18 | Usury Savings Clause | 71 |
| 9.19 | Counterparts | 71 |
| 9.20 | No Strict Construction | 72 |
| 9.21 | Effectiveness; Entire Agreement | 72 |
| 9.22 | No Fiduciary Duty | 72 |
| 9.23 | No Third Parties Benefit | 73 |
| 9.24 | PATRIOT Act | 73 |
Appendices
Appendix A Notice Addresses
iii
Schedules
| Schedule 4(J) | Investments |
| Schedule 4(P) | Structure Chart |
| Schedule 4.6 | Exceptions to Material Adverse Effect |
| Schedule 5.13 | Post-Closing Matters |
| Schedule 6.2 | Permitted Liens |
| Schedule 7 | Consents |
Exhibits
| Exhibit A | Form of Note |
| Exhibit B | Form of Assignment Agreement |
| Exhibit C | Form of Borrowing Notice |
| Exhibit D-1 | Form of U.S. Tax Compliance Certificate |
| Exhibit D-2 | Form of U.S. Tax Compliance Certificate |
| Exhibit D-3 | Form of U.S. Tax Compliance Certificate |
| Exhibit D-4 | Form of U.S. Tax Compliance Certificate |
| Exhibit E | Form of Compliance Certificate |
iv
TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT, dated as of June 29, 2026 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”), is entered into by and among Subsidiary Holdings II, LLC, a Delaware limited liability company (the “Borrower”), Strategic Yieldco LLC, a Delaware limited liability company (the “Lender”) and ALTER DOMUS (US) LLC, as administrative agent (together with its successors in such capacity, the “Administrative Agent”) and as collateral agent (together with its successors in such capacity, the “Collateral Agent”).
RECITALS:
WHEREAS, capitalized terms used in these recitals will have the respective meanings set forth for such terms in Section 1.1;
WHEREAS, the Lender has agreed, subject to the terms and conditions set forth herein, to make an Initial Term Loan to the Borrower in an aggregate principal amount of up to $25,000,000;
WHEREAS, the proceeds of the Initial Term Loan made hereunder shall be used as specified in Section 2.3; and
WHEREAS, the Borrower has agreed to secure all of its Obligations by granting to the Collateral Agent, for the benefit of the Secured Parties, a Lien on the Collateral as set forth in the Collateral Documents;
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, will have the following meanings:
“Account Bank” means with respect to any deposit account the applicable depository bank or the applicable securities intermediary at which such deposit account is held.
“Account Control Agreement” means the deposit account control agreement, among the Borrower, the Collateral Agent and the relevant Account Bank party thereto.
“Administrative Agent” has the meaning set forth in the preamble hereto.
“Adverse Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of the Borrower) at law or in equity, or before or by any Governmental Authority, domestic or foreign.
“Affiliate” means, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, that Person; provided, that in no event shall the Lender or any of its Affiliates be deemed to be an Affiliate of the Borrower for purposes of this Agreement or any other Credit Document.
“Agent Fee Letter” means that certain Administrative Agent Fee Letter, dated on or about the Closing Date, by and among the Borrower and the Administrative Agent.
“Agent Indemnitee” has the meaning set forth in Section 9.3(a).
“Agents” means, collectively, the Administrative Agent and the Collateral Agent.
“Aggregate Amounts Due” has the meaning set forth in Section 2.12.
“Agreement” has the meaning set forth in the preamble hereto.
“Alternative Financing,” as applied to any Person, means, without duplication (a) any total return swap, repo or other structured or derivative transaction entered into for the purposes of providing the economic equivalent of debt for borrowed money and (b) any guarantee of any transaction described in clause (a) entered into by any other Person. For the avoidance of doubt, the amount of any Indebtedness incurred under any Alternative Financing shall be the amount of debt for borrowed money that would have been incurred had such Alternative Financing taken the form of a loan, as determined in good faith by the Borrower.
“Anti-Corruption Laws” means Laws relating to anti-bribery or anti-corruption (governmental or commercial) which apply to the Parent or its Subsidiaries, including Laws that prohibit the corrupt payment, offer, promise, or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any Government Official, any foreign government employee or commercial entity in order to obtain an improper business advantage; including the FCPA and all national and international Laws enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.
“Anti-Terrorism Laws” means any of the Laws relating to terrorism, terrorism financing, economic sanctions, Export Controls or money laundering, including, but not limited to, (i) Executive Order No. 13224, (ii) the PATRIOT Act, (iii) the Laws comprising or implementing the Bank Secrecy Act, and (iv) the Export Controls and economic and financial sanctions or trade embargoes enacted, imposed, administered and enforced from time to time by the U.S. government, including those administered by OFAC, the U.S. Department of State or the U.S. Department of Commerce.
“Assignment Agreement” means an Assignment and Assumption Agreement substantially in the form of Exhibit B, with such amendments or modifications as may be approved by the Administrative Agent.
“Assignment Effective Date” as defined in Section 9.6(b).
2
“Assumed Income Tax Rate” means the highest effective marginal combined United States federal, state and local income tax rate for a Fiscal Year prescribed for an individual residing in New York, New York (taking into account (a) the deductibility of state and local income taxes for United States Federal income tax purposes, (b) applicable limitations on losses and deduction under applicable tax laws and (c) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income).
“Bank” means any entity subject to regulation under the U.S. Bank Holding Company Act of 1956, as amended (including any modifications made pursuant to the U.S. Gramm-Leach-Bliley Act), and other similar banking legislation, and the rules and regulations promulgated thereunder.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” or any successor statute and any other bankruptcy, insolvency, receivership, examinership, winding-up, liquidation, reorganization or relief of debtors or similar laws of general application or any amendment to, successor to or change in any such law.
“Bankruptcy Proceeding” means any voluntary or involuntary proceeding commenced under the Bankruptcy Code.
“Board of Governors” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.
“Borrower” has the meaning set forth in the preamble hereto.
“Borrowing Notice” means a written notice substantially in the form of Exhibit C, or such other form approved by the Administrative Agent.
“Borrower Net Assets” means as of any date of determination, the difference of (a) the aggregate net asset value of the Portfolio Investments and cash and Cash Equivalents (without duplication) of the Borrower, in each case based upon the most recent Valuation with respect to each Portfolio Investment; less (b) the aggregate amount (without duplication and solely to the extent not already deducted in determining the amount set forth in clause (a)) of all liabilities of the Borrower (excluding liabilities comprising Indebtedness) as shown on the balance sheet of the Borrower as of the last day of the most recent Fiscal Quarter for which financial statements of the Borrower have been delivered to the Lender pursuant to Section 5.1(a) or 5.1(b) or, from the Closing Date through the date on which the first financial statements are delivered hereunder to the Lender pursuant to Section 5.1(a) or 5.1(b), as reported on the Historical Financial Statements for the Fiscal Quarter ended May 31, 2026.
“Borrowing” means a borrowing hereunder consisting of the Initial Term Loan.
“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such jurisdiction are authorized or required by law or other governmental action to close.
“Capital Commitment” means with respect to a Portfolio Investment, a capital commitment of the Borrower to fund one or more capital contributions to such Portfolio Investment in the amount or pursuant to the relevant provisions set forth in the Organizational Documents with respect to such Portfolio Investment. “Capital Commitments” means, where the context may require, two or more Capital Commitments, collectively.
3
“Cash Equivalents” means, as at any date of determination:
(a) marketable securities (i) issued or directly and unconditionally guaranteed or insured as to interest and principal by the United States Government or (ii) issued by any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date;
(b) marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision of any such state, commonwealth or territory or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s;
(c) certificates of deposit, time deposits or bankers’ acceptances maturing within one year after such date and issued or accepted (i) by the Lender or (ii) by any commercial bank organized under the laws of the United States, any State or Commonwealth thereof or the District of Columbia that has capital and surplus of not less than $500,000,000;
(d) marketable short-term money market and similar highly liquid funds or corporate commercial paper or other short-term corporate obligations, in each case having a rating of at least P-1 or A-1 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); and
(e) investment funds investing substantially all of their assets in securities of the types described in clauses (a) through (d) above.
“Change of Control” means an event or series of events by which:
(a) (i) the Borrower ceases to be a wholly-owned direct or indirect Subsidiary of, and Controlled by, the Parent; (ii) the Borrower ceases to be wholly-owned direct subsidiary of Holdings, (iii) and/or any Subsidiary Guarantor ceases to be wholly-owned direct subsidiary of the Borrower; and/or
(b) any person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act, but excluding any employee benefit plan of such Person and its subsidiaries and any Person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of voting Equity Interests of the Parent representing more than 35% of the total voting power of the voting Equity Interests of the Parent;
4
provided that for purposes hereof, no Change of Control of Borrower or Parent shall occur so long as each of Borrower and Parent are both managed and Controlled by Mavik Capital Management LP or one of its Affiliates.
“Closing Date” has the meaning set forth in Section 3.1.
“Collateral” means, collectively, all of the property in which Liens are granted or purported to be granted pursuant to the Collateral Documents as collateral security for the Obligations, consisting of (i) 100% of the membership interests in Borrower owned by Holdings and (ii) 100% of the membership interests in each Subsidiary Guarantor owned by Borrower.
“Collateral Account” means a deposit account of the Borrower, such account shall be subject to a valid, first priority (upon the execution and delivery of the applicable Account Control Agreement with respect thereto by each of the parties thereto) Lien in favor of the Collateral Agent pursuant to the Collateral Documents.
“Collateral Agent” has the meaning set forth in the preamble hereto.
“Collateral Asset Repayments” means Realization Proceeds received by the Borrower during the Recycling Period that constitute repayments or prepayments of principal or return of capital (including liquidation preference in respect of preferred equity securities) in respect of any Portfolio Investment.
“Collateral Documents” means the Guaranty and Collateral Agreement, the Term Note, the Account Control Agreement, and all other instruments, documents and agreements delivered by the Borrower pursuant to this Agreement or any of the other Credit Documents granting to the Collateral Agent, for the benefit of the Secured Parties, a Lien on any property of the Borrower as security for the Obligations.
“Commitment” means an Initial Term Commitment.
“Compliance Certificate” means a Compliance Certificate of the Borrower substantially in the form of Exhibit E.
“Confidential Information” means, at any time, all data, reports, interpretations, forecasts and records containing or otherwise reflecting information and concerning the Borrower, the Parent or any Portfolio Investment, in each case which is not available to the general public, together with analyses, compilations, studies or other documents, which contain or otherwise reflect such information, in the case of each of the foregoing, made available by or on behalf of the Borrower or the Parent in connection with this Agreement or the Guaranty orally or in writing to the Agent or the Lender or their respective attorneys, certified public accountants or agents, but shall not include any data or information that: (a) was or became generally available to the public at or prior to such time (unless divulged by the Agent or the Lender or the Agents’ or the Lender’s respective attorneys, certified public accountants or agents in violation of this Agreement); or (b) was or became available to the Agent or the Lender or to the Agent or the Lender’s respective attorneys, certified public accountants or agents on a non-confidential basis from any third party that does not have an obligation to keep such information confidential at or prior to such time.
5
“Consents” means, each consent to the transfer and/or pledge of the Collateral to the Collateral Agent, as indicated in Schedule 7.
“Contractual Obligation” means, as applied to any Person, any provision of any of the Securities issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Controlled Entity” means, as to any Person, any other Person that is in Control of, or is Controlled by, such Person.
“Controlled Investment Affiliate” means, with respect to any Person, any subsidiary, investment vehicle or similar entity that (a) is organized by such Person for the purpose of making debt or equity investments and (b) controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the exclusive power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Credit Document” means any of (a) this Agreement, (b) the Term Note, (c) the Collateral Documents, (d) the Agent Fee Letter, (e) the Parent Guaranty, (f) the Subsidiary Guaranty, (g) the Escrow Agreement, (h) the Parent Side Letter and (i) any other document or agreement designated as such by the Administrative Agent and the Borrower.
“Credit Support Obligations” means guarantees, indemnification agreements, keepwell agreements, equity commitment letters, letters of credit, deferred purchase price obligations and any other similar arrangements, in each case provided by the Borrower in support of Indebtedness or other obligations of one or more Portfolio Investments.
“Debtor Relief Laws” means any applicable liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, receivership, insolvency, winding-up, dissolution, fraudulent conveyance, rearrangement, plan of arrangement, reorganization, proposal or similar statutes, laws, rules and regulations affecting the rights, remedies, or recourse of creditors generally, including without limitation the Bankruptcy Code and all amendments thereto.
“Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.
“Derivative Transactions” means any commodity, interest rate, equity or currency swap, cap, floor, collar, forward agreement or other exchange or protection agreement or any option with respect to any such transaction.
“Disqualified Equity Interests” means any Equity Interests which, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely in exchange for Equity Interests that are not otherwise Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof (other than solely in exchange for Equity Interests that are not otherwise Disqualified Equity Interests), in whole or in part, (c) provides for the regular scheduled mandatory payment of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Maturity Date.
6
“Dollars” and the sign “$” mean the lawful money of the United States.
“E-Signature” means the process of attaching to or logically associating with an Electronic Transmission an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Electronic Transmission) with the intent to sign, authenticate or accept such Electronic Transmission.
“E-System” means any electronic system approved by the Administrative Agent, including IntraLinks® and ClearPar® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Related Persons or any other Person, providing for access to data protected by passcodes or other security system.
“Electronic Transmission” means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail, or otherwise to or from an E-System (including, through IntraLinks/IntraAgency, SyndTrak or another relevant website or other information platform approved by the Administrative Agent (the “Platform”)).
“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by, the Borrower or any of its Subsidiaries or ERISA Affiliates, or with respect to any Pension Plan or Multiemployer Plan, to which the Borrower or any Subsidiary or ERISA Affiliate thereof has within the preceding five (5) plan years made contributions.
“Equity Interests” means any and all shares, interests, participations or other equivalents (however designated) of Equity Interests of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests, limited partnership interests, limited liability company interests, exempted limited partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (b) any trade or business (whether or not incorporated) which is a member of a group of trades or business under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (c) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (a) above or any trade or business described in clause (b) above is a member. Any former ERISA Affiliate of the Borrower or any Subsidiary of the Borrower will continue to be considered an ERISA Affiliate of the Borrower or such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of the Borrower or such Subsidiary and with respect to liabilities arising after such period for which the Borrower or such Subsidiary could be liable under the Internal Revenue Code or ERISA.
7
“Erroneous Payment” has the meaning set forth in Section 8.5(c).
“Escrow Agreement” means that certain Escrow Agreement to be executed by the Borrower and Parent in favor of U.S. Bank National Association.
“Event of Default” has the meaning set forth in Section 7.1.
“Exchange Act” means the Securities Exchange Act of 1934.
“Exchange Offer” means the offer to exchange all outstanding Parent 2026 Notes for 11.00% Senior Secured Notes of the Parent due July 1, 2027, pursuant to Parent's registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient (a) Taxes imposed on or measured by net income (however denominated, and including branch profits taxes) and franchise taxes imposed in lieu of net income taxes, in each case (i) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of the Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) imposed on any Recipient as a result of a present or former connection between such Recipient and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or taxing authority thereof or therein (other than such connection arising solely from any such Recipient having executed, delivered, become a party to, or performed its obligations or received a payment under, received or perfected a security interest under, received payments under, received or perfected a security interest under, or enforced, any Credit Document, engaged in any other transaction pursuant to or enforced any Credit Document, or sold or assigned an interest in any Credit Document); (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Recipient with respect to an applicable interest in a Term Loan or Commitment pursuant to a Law in effect on the date on which such Recipient (i) acquires such interest in the Term Loan or Commitment or otherwise becomes a party to this Agreement or (ii) changes its Lending Office, except in each case, to the extent that, pursuant to Section 2.14, amounts with respect to such Taxes were payable either to the Lender’s assignor immediately before the Lender became a party hereto or to the Lender immediately before it changed its Lending Office; (c) Taxes that are attributable to the failure by any Recipient to deliver the documentation required to be delivered pursuant to Section 2.14(f) or Section 2.14(g) and Taxes imposed under FATCA.
“Existing Maturity Date” has the meaning set forth in Section 2.16.
8
“Export Controls” means any applicable laws, regulations, and orders related to the regulation of imports, exports, re-exports, transfers, releases, shipments, transmissions, or any other provision or receipt of goods, technology, technical data, software, or services, including the Export Administration Regulations (15 C.F.R. § 730-774), the Arms Export Control Act (22 U.S.C. § 2778), the International Traffic in Arms Regulations (22 C.F.R. § 120-130), the Tariff Act of 1930 and regulations administered and enforced by U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement, and any other laws, regulations, and orders of a similar nature.
“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Internal Revenue Code and any fiscal or regulatory legislation, rules, guidance notes or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Internal Revenue Code.
“FCPA” means the U.S. Foreign Corrupt Practices Act (15 U.S.C. §§78dd-1 et seq.).
“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depository institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be the rate for the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) quoted to the Administrative Agent by three major banks of recognized standing (as selected by the Administrative Agent) on such day on such transactions as determined by the Administrative Agent.
“Fiscal Quarter” means, with respect to any Person, the fiscal quarter of such Person. In the case of the Borrower, Fiscal Quarter means a fiscal quarter of any Fiscal Year of the Borrower. A Fiscal Quarter may be designated by reference to the last day thereof (i.e., the “December 31, 2025 Fiscal Quarter” refers to the Fiscal Quarter ended on December 31, 2025, the last day of the Borrower’s fourth Fiscal Quarter for Fiscal Year 2025) or by reference to the applicable Fiscal Quarter of a Fiscal Year (i.e., the “Q4-2025 Fiscal Quarter” also refers to the Borrower’s fourth Fiscal Quarter for Fiscal Year 2025). For purposes of this Agreement, except to the extent expressly stated otherwise, references to any “Fiscal Quarter” will mean a Fiscal Quarter of the Borrower.
“Fiscal Year” means, with respect to any Person, the fiscal year of such Person. In the case of the Borrower, Fiscal Year means the fiscal year of the Borrower and its consolidated Subsidiaries ending on December 31 of each calendar year. A Fiscal Year may be designated by reference to the last day thereof (i.e., the “December 31, 2025 Fiscal Year” refers to the Fiscal Year ended on December 31, 2025) or by reference to the calendar year in which such Fiscal Year ends (i.e., the “Fiscal Year 2025” also refers to the Fiscal Year ended on December 31, 2025). For purposes of this Agreement, except to the extent expressly stated otherwise, references to any “Fiscal Year” will mean a Fiscal Year of the Borrower.
9
“Funds” means (i) Axar Special Opportunity Fund VI-B LLC and (ii) Mavik Real Estate Special Opportunities Fund, LP.
“Fund Agreements” means each of (i) the Third Amended and Restated Agreement of Limited Partnership of Mavik Real Estate Special Opportunities Fund, LP, dated June 10, 2022, and the (ii) Amended and Restated limited liability company agreement of Axar Special Opportunity Fund VI-B LLC, dated December 30, 2024.
“Fund Documents” means the Fund Agreements and the Subscription Documents, collectively.
“GAAP” means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect and applicable to the Borrower as of the date of determination thereof, including, if applicable, the adoption of provisions for investment companies (ASC 946).
“Government Official” means (a) any official, officer, employee or representative of, or any Person acting in an official capacity for or on behalf of, any Governmental Authority, (b) any political party or party official or candidate for political office or (c) any official, officer, employee, or any Person acting in an official capacity for or on behalf of, any company, business, enterprise or other entity owned (in whole or in substantial part) controlled by or Affiliated (as defined without reference to clause (a) of the second sentence set forth in the definition of “Affiliate”) with a Governmental Authority.
“Governmental Authority” means any international, multinational, foreign, national, federal, state, provincial, territorial, local or municipal government, or any bureau, court, agency or instrumentality or political subdivision thereof, or other entity exercising, or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of or pertaining to government, including any arbitral tribunal and including any supra-national bodies (such as the European Union or the European Central Bank).
“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.
“Guaranty and Collateral Agreement” means that certain Guarantee and Collateral Agreement to be executed by the Borrower in favor of the Collateral Agent.
“Holdings ” means Subsidiary Holdings I, LLC, a Delaware limited liability company.
“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to the Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow.
10
“Historical Financial Statements” means the balance sheets and related statements of income and cash flows of the Parent as of the Fiscal Year ended December 31, 2025 and as of the Fiscal Quarters ended March 31, 2025, June 30, 2025 and September 30, 2025.
“Indebtedness” as applied to any Person, means, without duplication, (a) all indebtedness for borrowed money; (b) all obligations evidenced by bonds, debentures, notes or similar instruments; (c) that portion of obligations with respect to capital or finance leases that is properly classified as a liability on a balance sheet in conformity with GAAP as in effect of the date hereof; (d) any obligation owed for all or any part of the deferred purchase price of property or services, which purchase price is (A) due more than six (6) months from the date of incurrence of the obligation in respect thereof or (B) evidenced by a note or similar written instrument; (e) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (f) Disqualified Equity Interests; (g) obligations of such Person in respect of any Derivative Transaction, excluding any Alternative Financing, whether entered into for hedging or speculative purposes (the amount of such obligation to be equal at any time to the net payments under such agreement or arrangement giving rise to such obligation that would be payable by such person at the termination of such agreement or arrangement); (h) obligations of such person in respect of any Alternative Financing (with the amount thereof being the amount of debt for borrowed money that would have been incurred had such Alternative Financing taken the form of a loan); (i) Credit Support Obligations in connection with the obligations of the type in clauses (a) through (h) of this definition, of any other Person; (h) obligations of the type in clauses (a) through (h) of this definition that are secured by a Lien on any property or asset owned or held by that Person regardless of whether such obligations are owed by or recourse to such Person (with the amount thereof being equal to the lesser of the amount of the obligation or the value of the property or asset subject to such Lien). For the avoidance of doubt, performance and completion guarantees and obligations under “bad boy” letters and principal guarantees with respect to which the likelihood of any payment being required thereunder is determined to be “remote” in accordance with GAAP at the most recent time of determination in accordance with such person’s customary practices shall not constitute Indebtedness.
“Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable and documented fees and disbursements of one firm of counsel for all Agent Indemnitees (together with one additional firm of local counsel for all Agent Indemnitees in each relevant jurisdiction and, in the event of any actual or potential conflict of interest between one or more Agent Indemnitees, such additional counsel for all similarly situated Agent Indemnitees as shall be appropriate to avoid such conflicts) and one firm of counsel for all Lender Indemnitees (together with one additional firm of local counsel for all Lender Indemnitees in each relevant jurisdiction and, in the event of any actual or potential conflict of interest between one or more Lender Indemnitees, such additional counsel for all similarly situated Lender Indemnitees as shall be appropriate to avoid such conflicts) in connection with any investigative, administrative or judicial proceeding or hearing commenced or threatened by any Person, whether or not any such Indemnitee will be designated as a party or a potential party thereto, and any fees or expenses reasonably incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of (a) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lender’s agreement to make the Term Loans or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral)); (b) the Agent Fee Letter or (c) any actual or prospective investigation, litigation or other proceeding relating to any of the foregoing, whether or not brought by any such Indemnitee or any of its Related Persons, any holders of securities or creditors (and including reasonable and documented attorneys’ fees), whether or not any such Indemnitee, Related Person, holder or creditor is a party thereto, and whether or not based on any securities or commercial law or regulation or any other Law or theory thereof, including common law, equity, contract, tort or otherwise.
11
“Indemnified Taxes” means (a) all Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Credit Document, and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitee” has the meaning set forth in Section 9.3(a).
“Initial Term Commitment” means the commitment of the Lender to make or otherwise fund an Initial Term Loan pursuant to Section 2.1(a)(i), and “Initial Term Commitments” means such commitments of the Lender in the aggregate. The aggregate amount of the Initial Term Commitments as of the Closing Date is $25,000,000.
“Initial Term Loan” means a term loan made by the Lender to the Borrower on the Closing Date pursuant to Section 2.1(a).
“Internal Revenue Code” means the Internal Revenue Code of 1986.
“Investment” means with respect to any Person (a) any direct or indirect purchase or other acquisition by such Person of a legal or beneficial interest in, any of the Securities of any other Person; (b) any direct or indirect loan, advance or capital contribution by such Person to any other Person and (c) any acquisition, whether by purchase, merger or otherwise, of all or a material portion of the assets of, or a division, unit, business line or product line of, any other Person.
“Investment Grade” means that the Term Loans are rated at least ‘BBB-’ by S&P, Baa3 by Moody’s or BBB- by Egan Jones.
“Laws” means, with respect to any Person, (a) any federal, state, provincial, territorial, local, foreign, multinational or international statutes, laws, treaties, judicial decisions, standards, rules and regulations, guidances, guidelines, ordinances, rules, judgments, writs, orders, decrees, codes, plans, injunctions, permits, concessions, grants, franchises, governmental agreements and governmental restrictions (including administrative or judicial precedents or authorities), and (b) the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
12
“Lender” has the meaning set forth in the preamble hereto.
“Lender Affiliate” means any Controlled Investment Affiliate of the Lender.
“Lender Indemnitee” has the meaning set forth in Section 9.3(a).
“Lending Office” means, with respect to the Lender, the office or offices of the Lender specified as its “Lending Office” beneath its name on Appendix B hereto in the administrative questionnaire delivered by the Lender to the Borrower and the Administrative Agent, or, in each case, such other office or offices of the Lender as it may from time to time notify the Borrower and the Administrative Agent.
“Liabilities” means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes, commissions, charges, disbursements and expenses (including those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.
“Lien” means (a) any lien, mortgage, pledge, assignment, assignment by way of security, security interest, charge, hypothec, right of set-off or similar encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing and (b) in the case of Securities, any transfer restriction, purchase option, call or similar right of a third party with respect to such Securities; provided that in no event shall an operating lease in and of itself be deemed a Lien.
“Loan Parties” means (i) Holdings, (ii) the Borrower and the Subsidiary Guarantors; each of the foregoing being a Delaware limited liability company.
“LTV Ratio” means as of any date of determination, the ratio of (a) the outstanding principal amount of the Term Loans as of such date plus (without duplication) any other Obligations which are overdue under any Credit Document to (b) the Borrower Net Assets as of such date.
“Margin Stock” means “margin stock” as such term is defined in Regulation U of the Board of Governors as in effect from time to time.
“Material Action” means to (a) file or consent to the filing of any bankruptcy, insolvency or reorganization petition under any applicable federal, state or other law relating to a bankruptcy naming the Borrower as debtor or other initiation of bankruptcy or insolvency proceedings by or against the Borrower, or otherwise seek, with respect to the Borrower, relief under any laws relating to the relief from debts or the protection of debtors generally; (b) seek or consent to the appointment of a receiver, liquidator, conservator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower or all or any portion of its properties; (c) make or consent to any assignment for the benefit of the Borrower’s creditors generally; (d) admit in writing the inability of the Borrower to pay its debts generally as they become due; or (e) petition for or consent to substantive consolidation of the Borrower with any other person.
13
“Material Adverse Effect” means (a) an adverse effect on the business, operations, properties, assets or financial condition of Borrower or the business, operations, properties, assets or financial condition of the Portfolio Investments, in either case resulting in a material adverse effect on the ability of the Borrower to fully and timely perform its obligations under the Credit Documents, (b) a material adverse effect on the Collateral, an adverse effect on the Collateral Agent’s Lien on any material portion of the Collateral or the priority of such Liens; or (c) a material adverse effect on the rights, remedies and benefits available to, or conferred upon, the Agent or the Lender or Secured Party under, or the legality, validity, binding effect or enforceability of the Credit Documents, taken as a whole.
“Maturity Date” means the earlier of (a) the date that is eighteen (18) months following the Closing Date; provided that, subject to Section 2.16, if by June 30, 2027, the Parent 2026 Notes have not been either (i) fully repaid and discharged or (ii) exchanged for, or refinanced with the proceeds of, new debt securities of Parent having a maturity date at least twelve (12) months after the maturity date of the Exchange Notes, then the "Maturity Date" shall be accelerated to July 1, 2027 and (b) the date that all the Term Loans become due and payable in full hereunder, whether by acceleration or otherwise; provided further; that in the event the Maturity Date is not a Business Day, the Maturity Date shall be extended to the next succeeding Business Day as provided in Section 2.11(d).
“Moody’s” means Moody’s Investor Services, Inc.
“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
“NAIC” means The National Association of Insurance Commissioners.
“Natural Person” means a natural person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person.
“Net Realization Proceeds” means all Realization Proceeds after deducting: (a) all bona fide fees, costs and expenses incurred by the Borrower in relation to such Realization Proceeds, and (b) all Taxes or Tax Distributions payable by the Borrower in connection with such Realization Proceeds.
“NYFRB” means the Federal Reserve Bank of New York.
“NYFRB Rate” means, for any day, the Federal Funds Effective Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if such rate is not published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. New York City time on such date received by the Administrative Agent from a federal funds broker of recognized standing selected by it.
14
“Obligations” means all obligations of every nature of the Borrower from time to time owed to the Agent, the Lender, any Indemnitee or any other Secured Party under any Credit Document, in each case, whether for principal, premium, interest (including interest premiums, fees and other amounts incurred during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, whether or not due and payable and whether or not allowed or allowable in such proceeding), fees, expenses, indemnification or otherwise.
“OFAC” means the U.S. Department of Treasury’s Office of Foreign Assets Control.
“OFAC Lists” means, collectively, the SDN List, the Sectoral Sanctions Identification List (SSI List) and/or any other list of blocked or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any applicable executive orders.
“Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization, as applicable, and its by-laws, (b) with respect to any limited partnership, its certificate of limited partnership, its limited partnership agreement and any amendments thereto, (c) with respect to any general partnership, its partnership agreement and (d) with respect to any limited liability company, its certificate of registration or formation or articles of organization, as applicable, and its operating agreement or limited liability company agreement, as applicable. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” will only be to a document of a type customarily certified by such governmental official.
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Credit Document, except any such Taxes that are imposed as a result of a present or former connection between a Recipient and the jurisdiction imposing such Tax other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Credit Document or sold or assigned an interest in any Term Loan or Credit Document imposed with respect to an assignment.
“Parent” means Terra Property Trust, Inc., a Maryland corporation.
“Parent Guaranty” means the Parent Guaranty, to be executed by the Parent in favor of the Agent.
“Parent 2026 Notes” means the 6.00% Senior Notes due June 30, 2026 of Parent.
“Participant Register” has the meaning set forth in Section 9.6(g).
15
“Parent Side Letter” means the letter agreement, dated June 29, 2026, between Parent and the Borrower regarding the use of proceeds of the Term Loan.
“PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001.
“Payment Account” means the account of the Administrative Agent that the Administrative Agent designates in writing on the Closing Date or from time to time thereafter as its “Payment Account” to the other parties hereto.
“Payment Direction Letter” means the letter agreement, dated June 29, 2026, by the Borrower, regarding the disbursement of proceeds of the Term Loan.
“Payment Notice” has the meaning set forth in Section 8.5(c).
“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.
“Permitted Liens” has the meaning set forth in Section 6.2.
“Person” means and includes Natural Persons, corporations, exempted companies, limited partnerships, exempted limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities irrespective of whether they have separate legal personality in their jurisdiction of incorporation, registration or formation.
“Plan Asset Regulations” means 29 C.F.R. §2510.3-101, as modified by Section 3(42) of ERISA.
“Plan Assets” means “plan assets” as defined under the Plan Asset Regulations.
“Platform” has the meaning set forth in the definition of “Electronic Transmission.”
“Portfolio Investment” means the Borrower’s Investment in (i) the Funds, as set forth on Schedule 4(J), (ii) the membership interest in the Subsidiary Guarantors, (iii) the Boundary Investment and the (iv) 601 Walnut Investment (as set forth in Schedule 4(J).
“Realization Proceeds” means the proceeds actually received by the Borrower or any of its Subsidiaries in respect of (i) any sale, disposition or transfer, whether in one transaction or a series of related transaction(s), of any interest, directly or indirectly, in the Funds or any other Portfolio Investment, and (ii) all dividends and other distributions received by the Borrower from the Funds or any other Portfolio Investment, including, without limitation, any payments of principal and interest with respect to loans and dividends with respect to preferred equity securities; provided, however, that Realization Proceeds shall exclude distributions in respect of Borrower’s Interest in Mavik Real Estate Special Opportunities Fund, LP to the extent such distributions (x) do not exceed $2.8 million in the aggregate, and (y) are applied to pay current interest in respect of the Initial Term Loan.
16
“Recipient” means (a) the Administrative Agent or (b) the Lender, as applicable.
“Recycling Period” means the period commencing on the Closing Date and ending on the date that is six (6) months after the Closing Date.
“Register” has the meaning set forth in Section 2.4(b).
“Related Person” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, partner, agent, trustee, attorney, accountant and other advisor of or to such Person or any of its Affiliates.
“Responsible Officer” means with respect to the Borrower, the manager, managing member, president, copresident, treasurer, director, senior managing director or general counsel of the Borrower.
“Restricted Distribution” means with respect to any Person (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of Equity Interests of such Person now or hereafter outstanding, except a dividend payable solely in Equity Interests of such Person (other than Disqualified Equity Interests); (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Equity Interests of such Person now or hereafter outstanding, other than in exchange for Equity Interests of such Person (other than Disqualified Equity Interests); and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Equity Interests of such Person now or hereafter outstanding, other than in exchange for Equity Interests of such Person (other than Disqualified Equity Interests).
“S&P” means S&P Global Ratings, or any successor entity thereto.
“Sanctioned Country” means, at any time, any country or territory that is the subject or target of any comprehensive economic or financial sanctions or trade embargoes under Sanctions.
“Sanctioned Person” means any Person: (a) listed in any sanctions-related list of designated Persons maintained by the United States (including, but not limited to, OFAC Lists), the United Nations Security Council, the European Union, His Majesty’s Treasury of the United Kingdom or any other relevant sanctions authority; (b) 50% or more, individually or in the aggregate, owned by any Person described in paragraph (a) hereof; or (c); that is otherwise the target of Sanctions.
“Sanctions” means economic and financial sanctions or trade embargoes enacted, imposed, administered and enforced from time to time by (a) the U.S. government, including OFAC and the U.S. Department of State, (b) the European Union or any of its member states, (c) His Majesty’s Treasury of the United Kingdom or (d) any other relevant sanctions authority with jurisdiction over the Parent or its Subsidiaries.
17
“SDN List” means the Specially Designated Nationals and Sanctioned Persons List maintained by OFAC.
“Secured Party” means the Agent, the Lender and each Indemnitee (solely to the extent of any outstanding claim for Indemnified Liabilities of such Indemnitee pursuant to and in accordance with Section 9.3).
“Securities” means any Equity Interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
“Side Letter” means any letter or other agreement of any type that has the effect of establishing rights of the Borrower under, or altering or supplementing, the terms of the Fund Agreements with respect to any Fund.
“Solvent” means that with respect to any Person as of the date of determination, (a) the fair value of the present assets of such Person and its Subsidiaries, taken as a whole, exceeds the debts (including contingent liabilities) of such Person and its Subsidiaries, taken as a whole, (b) the present fair saleable value of the assets of such Person and its Subsidiaries, taken as a whole, is not less than the amount that will be required to pay the probable liabilities (including contingent liabilities) of such Person and its Subsidiaries, taken as a whole, on their debts as such debts become absolute and matured, (c) such Person and the Subsidiaries, taken as a whole, are able to pay their debts (including current obligations and contingent liabilities) as such debts and liabilities become absolute and matured and do not intend to incur, or believe they will incur, debts (including current obligations and contingent liabilities) beyond their ability to pay such debts and liabilities as they mature in the ordinary course of business, and (d) the capital of such Person and its Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of such Person or its Subsidiaries, taken as a whole, contemplated as of such date. For the purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“Subscription Agreement” means the Subscription Agreement executed by the Parent in connection with its subscription for a limited partnership interest in any Fund.
“Subscription Documents” means the Subscription Agreement and any Side Letters.
“Subsidiary” means, with respect to any Person, any corporation, exempted company, partnership, exempted limited partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided that in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person will be deemed to be outstanding.
18
“Subsidiary Guarantors” means (i) Fund Financing LLC, (ii) Peachtree Lendco LLC, (iii) Boundary Pref LLC, (iv) New Walnut Member LLC and (v) Mavik Revol One Holdings LLC; each of the foregoing being a Delaware limited liability company.
“Subsidiary Guaranty Agreement” means the Subsidiary Guaranty and Pledge Agreement, to be executed by the Subsidiary Guarantors in favor of the Agent.
“Tax” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding (including backup withholding) of any nature and whatever called, levied, collected, withheld or assessed by any Governmental Authority, together with any interest thereon, additions to tax or penalties imposed with respect thereto.
“Tax Distributions” means, distributions made to any direct owner of the Borrower with respect to a taxable period equal to estimated or anticipated taxes at the Assumed Income Tax Rate with respect to the income and gain allocated to such owner in respect of a membership interest in the Borrower for such taxable period, assuming that such owner’s only income, gain or loss for such taxable period and each prior taxable period was income or loss attributable to a membership interest in the Borrower.
“Term Loans” and “Term Loan” shall each mean the Initial Term Loan.
“Term Loan Exposure” means, with respect to the Lender, as of any date of determination, the outstanding principal amount of the Term Loans of the Lender; provided that, at any time while any Commitment remains in effect, the Term Loan Exposure of the Lender will be equal to the aggregate of the outstanding principal amount of the Lender’s Term Loans (if any) plus the Lender’s outstanding Commitment (if any).
“Term Note” means a promissory note in the form of Exhibit A.
“Termination Conditions” means that the principal of and interest on each Term Loan and all other Obligations (other than amounts in respect of indemnification, expense reimbursement, yield protection or tax gross-up and contingent obligations, in each case that are not then owing or with respect to which no claim has been made) have been paid in full.
“Transaction Costs” means the fees, costs and expenses paid or payable by the Borrower on or about the Closing Date in connection with the relevant Transactions.
“Transactions” means (a) the execution and delivery of the Credit Documents on the Closing Date, (b) the funding of the Initial Term Loan on the Closing Date, (c) the payment of a Restricted Payment using the proceeds of the Initial Term Loan on the Closing Date and (d) the use of the proceeds thereof in accordance with this Agreement and the payment of Transaction Costs related to the foregoing.
19
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the security interests of the Collateral Agent in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, the term “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
“U.S.” or “United States” means United States of America.
“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Internal Revenue Code.
“Valuation” means with respect to a Portfolio Investment, the value of such Portfolio Investment reported on the balance sheet of the Borrower as of the last day of the most recent Fiscal Quarter for which financial statements of the Borrower have been delivered to the Administrative Agent pursuant to Section 5.1(a) or 5.1(b) or, from the Closing Date through the date on which the first financial statements are delivered hereunder to the Administrative Agent pursuant to Section 5.1(a) or 5.1(b), as reported on the Historical Financial Statements for the Fiscal Quarter ended May 31, 2026.
1.2 Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein will have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered to the Lender pursuant to Section 5.1 will be prepared in accordance with GAAP as in effect at the time of such preparation. If at any time any change in GAAP would affect the computation of any financial requirement or compliance with any covenant set forth in any Credit Document, and either the Borrower or the Lender will so request, the Administrative Agent, the Lender and the Borrower will negotiate in good faith to amend such ratio, requirement or covenant to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Lender); provided that until so amended, such requirement or covenant will continue to be computed in accordance with GAAP prior to such change therein. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein will be construed, and all computations of amounts referred to in Section 5 and Section 6 will be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other Liabilities of the Borrower or any Subsidiary of the Borrower at “fair value.”
20
1.3 Interpretation, etc. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References to “hereof” or “herein” mean of or in this Agreement, as applicable. References herein to any Section, Schedule or Exhibit will be to a Section, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use herein of the word “include” or “including,” when following any general statement, term or matter, will not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather will be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. Unless the context requires otherwise, any definition of or reference to any agreement, instrument or other document (including any Organizational Document) will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified, in each case without limiting any restrictions on such amendments, supplements or modifications set forth herein or in any other Credit Document. Any reference herein to any Person will be construed to include such Person’s successors and permitted assigns. The words “asset” and “property” will be construed to have the same meaning and effect. The word “will” shall be construed to have the same meaning and effect as the word “shall.” Any reference to any law or regulation will (a) include all statutory and regulatory provisions consolidating, replacing or interpreting or supplementing such law or regulation and (b) unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.
1.4 Certifications. Any certificate or other writing required hereunder or under any other Credit Document to be certified by any officer or other authorized representative of any Person will be deemed to be executed and delivered by such officer or other authorized representative solely in such individual’s capacity as an officer or other authorized representative of such Person and not in such officer’s or other authorized representative’s individual capacity.
1.5 Divisions and Other Transactions. Any reference in this Agreement or any other Credit Document to a merger, consolidation, amalgamation, conveyance, disposal, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, partnership or corporation, or an allocation of assets to a series of or one or more limited liability companies, partnerships or corporations, or the unwinding of such a division or allocation, as if it were a merger, consolidation, amalgamation conveyance, disposal, assignment, sale, disposition or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company, partnership or corporation shall be deemed to constitute the formation of a separate Person, and any such division shall constitute a separate Person hereunder and under the other Credit Documents (and each division of any limited liability company, partnership or corporation that is a subsidiary, joint venture or any other like term shall also constitute such a Person).
Section 2. LOANS
2.1 Term Loans.
(a) Subject to the terms and conditions hereof, the Lender agrees to make on the Closing Date, one Borrowing of Initial Term Loan to the Borrower in an aggregate amount up to the Lender’s Initial Term Commitment, as shall be specified by Borrower to Lender reasonably in advance of the Borrowing Date.
(b) The Borrower will deliver to the Administrative Agent on behalf of the Lender a fully executed Borrowing Notice.
21
(c) Any amounts borrowed under this Section 2.1 and subsequently repaid or prepaid may not be reborrowed. All amounts owed hereunder with respect to the Term Loans will be paid in full no later than the Maturity Date.
2.2 Availability of Funds.
(a) Availability of Funds. The Lender shall have no obligation to fund the Initial Term Loan unless the conditions precedent set forth in Sections 3.1 and 3.2 have been satisfied or waived by the Lender.
2.3 Use of Proceeds.
(a) The proceeds of the Initial Term Loan will be used (i) to pay Transaction Costs in connection therewith, including the upfront fee payable pursuant to Section 2.7 and the closing costs, fees and expenses payable pursuant to Section 9.2, (ii) to make a distribution by the Borrower to the Parent (which distribution will not be on account of principal, interest or any other amount in respect of the Term Loans); Parent shall use the proceeds of the Initial Term Loan, in accordance with Section 3.2(d), and (iii) subject to the limitations set forth in the Parent Side Letter, general corporate purposes (including without limitation, investments).
(b) No portion of the proceeds of the Term Loans will be used to purchase or carry Margin Stock in any manner that causes or would reasonably be expected to cause such Term Loan or the application of the proceeds thereof to violate Regulation T, Regulation U or Regulation X of the Board of Governors or any other regulation thereof or to violate the Exchange Act.
(c) Neither the Borrower nor any of its Controlled Entities will, directly or indirectly, use any part of any proceeds of the Term Loans or lend, contribute, or otherwise make available such proceeds to any Person for the purpose of (i) funding or facilitating any activities or business of or with any Person that, at the time of such funding or facilitation, is the subject or the target of Anti-Terrorism Laws, (ii) to fund or facilitate any activities or business of or in any Sanctioned Country or (iii) in any other manner that would reasonably be expected to result in a violation by any Person of any Anti-Terrorism Law. No part of the proceeds of any Term Loan will be used, directly or indirectly, by the Borrower or any of its Controlled Entities for any payments to any Government Official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of Anti-Corruption Laws.
2.4 Evidence of Debt; Register; Notes.
(a) Evidence of Debt. The Lender will maintain on its internal records an account or accounts evidencing the Indebtedness of the Borrower to the Lender, including the amounts of the Term Loans made by it and each repayment and prepayment in respect thereof. Any such recordation will be conclusive and binding on the Borrower, absent manifest error; provided that failure to make any such recordation, or any error in such recordation, will not affect the Lender’s Commitment or the Borrower’s Obligations in respect of any Term Loan; and provided further, in the event of any inconsistency between the Register and the Lender’s records, the recordations in the Register will govern.
22
(b) Register. Solely as non-fiduciary agent for the Borrower, the Administrative Agent will maintain a register for the recordation of the names and addresses of the Lender and the Term Loan of the Lender from time to time (the “Register”). The Register will be available for inspection by the Borrower or the Lender (with respect to any entry relating to the Lender’s Term Loan) at any reasonable time from time to time upon reasonable prior written notice. The Administrative Agent will record in the Register the Term Loans, the principal amounts (and stated interest) of the Term Loans owing to the Lender pursuant to the terms hereof from time to time and each repayment or prepayment in respect of the principal amount of the Term Loans, and any such recordation will be conclusive and binding on the Borrower and the Lender, absent manifest error; provided that failure to make any such recordation, or any error in such recordation, will not affect the Borrower’s Obligations in respect of any Term Loan. The Administrative Agent shall have no liability for any error or omission in maintaining the Register except to the extent caused by its gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final non-appealable judgment. The Borrower hereby designates the Administrative Agent to serve as the Borrower’s non-fiduciary agent solely for purposes of maintaining the Register as provided in this Section 2.4, and the Borrower hereby agrees that, to the extent the Administrative Agent serves in such capacity, the Administrative Agent and its officers, directors, employees, agents and affiliates will constitute “Indemnitees.”
(c) Notes. If so requested by the Lender by written notice to the Borrower at least one (1) Business Day prior to the Closing Date or at any time thereafter, the Borrower will execute and deliver to the Lender (and/or, if applicable and if so specified in such notice, to any Person who is a permitted assignee of the Lender pursuant to Section 9.6) on the Closing Date a Term Note to evidence the Lender’s Term Loans.
2.5 Interest on Loans.
(a) Subject to Section 2.6 below, each Term Loan will bear interest on the unpaid principal amount thereof for each day from the Closing Date (or the funding date with respect to amounts pre-funded in accordance with Section 3.2(e)) with respect thereto to repayment (whether by acceleration or otherwise) at a rate per annum equal to eleven percent (11.00%), payable in cash in arrears on the last Business Day of each calendar quarter.
(b) Interest payable hereunder will be computed on the basis of a 365-day year (or 366-day year, as the case may be) for the actual days elapsed. In computing interest on any Term Loan, the date of the making of such Term Loan will be included, and the date of payment of such Term Loan will be excluded; provided that if a Term Loan is repaid on the same day on which it is made, one day’s interest will be paid on that Term Loan.
2.6 Default Interest. Upon the occurrence and during the continuance of an Event of Default, the overdue principal amount of any Term Loans and, to the extent permitted by applicable law and due and owing, any overdue interest payments on the Term Loans and any other overdue fees and other overdue amounts, will bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) from the date of such Event of Default, payable on demand at a rate that is five percent (5.00%) per annum in excess of the interest rate otherwise payable hereunder with respect to the Term Loans; provided if any such amount remains overdue for a period of ten (10) Business Days after the original due date therefor, the interest rate applicable to such amount shall increase by an additional five percent (5.00%) on such tenth (10th) Business Day and on the last Business Day of each subsequent ten (10) Business Day period for which such amount remains unpaid. Payment or acceptance of the increased rates of interest provided for in this Section 2.6 is not a permitted alternative to timely payment and will not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Agent or the Lender.
23
2.7 Fees.
(a) The Borrower agrees to pay to the Lender, in cash on the Closing Date, a non-refundable upfront fee equal to four percent (4.00%) of the principal amount of the Initial Term Loan. The upfront fee shall be fully earned when paid and shall not be capitalized or paid in kind.
(b) The Borrower agrees to pay to the Agents such other fees in the amounts and at the times separately agreed upon in the Agent Fee Letter or other Credit Document.
(c) Once paid, none of the foregoing fees will be refundable under any circumstances.
2.8 Scheduled Payments. The Borrower will repay to the Administrative Agent for the ratable account of the Lender on the Maturity Date, the aggregate principal amount of all Term Loans outstanding on such date.
2.9 Prepayments.
(a) Voluntary Prepayments. Any time and from time to time, the Borrower may prepay the Term Loans, in whole or in part, on a Business Day in an aggregate minimum amount of $300,000 and integral multiples of $100,000 in excess of that amount (or, in each case, if less, the entire amount thereof), and upon prior written notice given to the Administrative Agent, by 2:00 p.m. (New York City time) three (3) Business Days prior to such payment. Upon the giving of any such notice, the principal amount of the Term Loans specified in such notice will become due and payable without premium or penalty on the prepayment date specified therein. Any such voluntary prepayment will be applied as specified in Sections 2.10.
(b) Mandatory Prepayments.
(i) The Borrower shall apply one hundred percent (100%) of all Net Realization Proceeds received by Borrower, promptly (but in any event within two (2) Business Days) upon receipt by the Borrower, to prepay the Term Loans.
(ii) Notwithstanding clauses (i) above, during the Recycling Period the Borrower may use Collateral Asset Repayments to fund Capital Commitments or acquire or fund replacement Portfolio Investments, in each case with the Lender's prior written approval (not to be unreasonably withheld, conditioned or delayed); provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom, (B) such amounts remain on deposit in a Collateral Account until applied as approved by the Lender and (C) the Borrower shall provide such supporting information as the Lender may reasonably request. Any Collateral Asset Repayments not so approved or applied prior to the end of the Recycling Period shall be applied to prepay the Term Loans promptly following the expiration of the Recycling Period.
24
(iii) The Borrower shall provide by 2:00 p.m. (New York City time) one (1) Business Day advance written notice to the Administrative Agent of any prepayment pursuant to this Section 2.9(b).
2.10 Application of Prepayments.
(a) Application of Prepayments. Any prepayment of Term Loans will be applied to the outstanding Term Loans of the Lender.
(b) Application of Payments or Proceeds. During the continuance of an Event of Default, the Administrative Agent may and will upon the direction of the Lender apply any and all payments received by the Administrative Agent in respect of any Obligation in accordance with Section 7.3. All payments made by the Borrower to the Administrative Agent after any or all of the Obligations have been accelerated (so long as such acceleration has not been rescinded), including proceeds of Collateral, will be applied in accordance with Section 7.3.
2.11 General Provisions Regarding Payments.
(a) All payments by the Borrower of principal, interest, fees and other Obligations will be made in Dollars in same day funds and by wire transfer (which will be the exclusive means of payment hereunder), without defense, setoff or counterclaim, free of any restriction or condition, and delivered to the Administrative Agent not later than 2:00 p.m. (New York City time) on the date due at the Payment Account for the account of the Lender; for purposes of computing interest and fees, funds received by the Administrative Agent after that time on such due date may be deemed by the Administrative Agent, in its sole discretion, to have been paid by the Borrower on the next succeeding Business Day.
(b) All payments of the principal amount of any Term Loan made pursuant to Section 2.9 will be accompanied by payment of accrued interest on the principal amount being repaid or prepaid, and all such payments will be applied to the payment of interest then due and payable before application to principal.
(c) [Reserved].
(d) Whenever any payment to be made hereunder is stated to be due on a day that is not a Business Day, such payment will be made on the next succeeding Business Day and such extension of time will be included in the computation of the payment of interest hereunder.
(e) The Administrative Agent may deem any payment by or on behalf of the Borrower hereunder that is not made in same day funds prior to 2:00 p.m. (New York City time) to be a nonconforming payment. Any such non-conforming payment will not be deemed to have been received by the Administrative Agent until the later of (i) the time such funds become available funds and (ii) the applicable next Business Day. The Administrative Agent will give prompt written notice to the Borrower if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 7.1(a). Interest will continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.5 from the date such amount was due and payable until the date such amount is paid in full.
25
2.12 [Reserved].
2.13 Increased Costs; Capital Adequacy.
(a) Compensation For Increased Costs and Taxes. Subject to the provisions of Section 2.14 (which will be controlling with respect to the matters covered thereby), in the event that the Lender is a bank and the Lender determines in good faith (which determination will, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a Governmental Authority, in each case that becomes effective after the Closing Date (or, if later, the date the Lender became a Lender hereunder), or compliance by the Lender with any request or directive issued or made after the Closing Date (or, if later, the date the Lender became a Lender hereunder) by any central bank or other Governmental Authority: (i) subjects the Lender (or its applicable Lending Office) to any additional Tax (other than (x) Indemnified Taxes and (y) Excluded Taxes) with respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder or thereunder or any payments to the Lender (or its applicable Lending Office) of principal, interest, fees or any other amount payable hereunder or thereunder; (ii) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of the Lender; or (iii) imposes any other condition (other than with respect to a Tax matter) on or affecting the Lender (or its applicable Lending Office) or its obligations hereunder; and the result of any of the foregoing is to increase the cost to the Lender of agreeing to make, making or maintaining Term Loans hereunder or to reduce any amount received or receivable by the Lender (or its applicable Lending Office) with respect thereto; then, in any such case, the Borrower will pay to the Lender, within 15 Business Days of receipt of the statement referred to in the next sentence, such additional amount or amounts as may be necessary to compensate the Lender for any such increased cost or reduction in amounts received or receivable hereunder; provided, however, that (a) the Lender may only require such payment if the Lender is requiring payments from all similarly situated borrowers to which it has made term loans as of the date of such request and (b) any such payment may not apply to amounts accrued, incurred or paid by the Lender more than 180 days prior to the date of Lender’s statement delivered to Borrower in respect of such payment. The Lender will deliver to the Borrower (with a copy to the Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to the Lender under this Section 2.13(a), which statement will be conclusive and binding upon all parties hereto absent manifest error.
26
(b) Capital Adequacy Adjustment. If the Lender is a bank and determines that any law, rule or regulation adopted after the Closing Date regarding capital or liquidity requirements, or any change therein or in the interpretation or administration thereof, or compliance by the Lender, its applicable Lending Office or any entity controlling the Lender with any guideline, request or directive regarding capital or liquidity requirements, in each case effective after the Closing Date, has or would have the effect of reducing the rate of return on capital of the Lender or any entity controlling the Lender as a consequence of the Lender's Term Loans or other obligations hereunder to a level below that which the Lender or such controlling entity would have achieved but for such adoption, change or compliance, then from time to time, within fifteen (15) Business Days after receipt by the Borrower of a written statement from the Lender, the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender or such controlling entity for such reduction; provided that the Lender may require such payment only if it or an affiliate is generally requiring comparable payments from similarly situated borrowers and such payment does not relate to amounts accrued, incurred or paid more than one hundred eighty (180) days before the date of the Lender's statement to the Borrower. The Lender's statement shall set forth in reasonable detail the basis for calculating such additional amounts and shall be conclusive absent manifest error.
(c) Dodd-Frank; Basel III. Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Office of Superintendent of Financial Institutions, the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case in respect of this clause (ii) pursuant to Basel III, will, in each case, be deemed to be a change in law, treaty or governmental rule, regulation or order under subsection (a) above and/or a change in law, rule or regulation (or any provision thereof) regarding capital or liquidity requirements under subsection (b) above, as applicable, regardless of the date enacted, adopted or issued.
2.14 Taxes; Withholding, etc.
(a) Except as required by Law or otherwise provided in this Section 2.14, each payment by or on account of the Borrower under any Credit Document will be made without deduction or withholding for any Taxes with respect thereto.
(b) If any Taxes (as determined in the good faith discretion of the Borrower or the Administrative Agent) will be required by any Law to be deducted or withheld from or in respect of any amount payable under any Credit Document to any Recipient (i) to the extent such Taxes required to be deducted or withheld are Indemnified Taxes, such amount will be increased as necessary to ensure that, after all required deductions or withholdings for Indemnified Taxes are made (including deductions or withholdings for Indemnified Taxes applicable to any increases to any amount under this Section 2.14(b)(i)), such Recipient receives the amount it would have received had no such deductions or withholdings for Indemnified Taxes been made, (ii) the Borrower or the Administrative Agent, as applicable, will make such deductions or withholdings, (iii) the Borrower or the Administrative Agent, as applicable, will timely pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable Law and (iv) within thirty (30) days after any such payment by the Borrower is made, the Borrower will deliver to the Administrative Agent an original or certified copy of a receipt evidencing such payment or other evidence of payment reasonably satisfactory to the Administrative Agent.
27
(c) In addition, the Borrower will timely pay to the relevant Governmental Authority, in accordance with applicable law, any Other Taxes. Within thirty (30) days after the date of any payment of Other Taxes by the Borrower pursuant to this Section 2.14(c), the Borrower will deliver to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof or other evidence of payment reasonably satisfactory to the Administrative Agent.
(d) Without duplication of Section 2.14(b) or Section 2.14(c), the Borrower will indemnify and reimburse, within thirty (30) days after receipt of a written demand therefor (with copy to the Administrative Agent), each Recipient for all Indemnified Taxes (including any Indemnified Taxes imposed or asserted by any jurisdiction on or attributable to amounts payable under this Section 2.14) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Any Recipient claiming indemnity pursuant to this Section 2.14(d) will use reasonable efforts to notify the Borrower of the imposition of the relevant Indemnified Taxes as soon as practicable after the Recipient becomes aware of such imposition; provided that any failure to provide any such notice shall not affect the Borrower’s obligation to indemnify any Recipient for any such Indemnified Taxes hereunder. A certificate of the Recipient (or of the Administrative Agent on its own behalf or on behalf of such Recipient) claiming any compensation under this clause 2.14(d), setting forth in reasonable detail the amounts to be paid thereunder will be delivered to the Borrower with copy to the Administrative Agent, and such certificate will be conclusive, binding and final for all purposes, absent manifest error.
(e) Without limiting Section 2.15, the Lender claiming any additional amounts payable pursuant to this Section 2.14 will use its reasonable efforts (consistent with its internal policies and Law) to change the jurisdiction of its Lending Office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of the Lender, be otherwise disadvantageous to the Lender.
(f)
(i) If the Lender or the Administrative Agent is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Credit Document will deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, the Lender or the Administrative Agent, if reasonably requested by the Borrower or the Administrative Agent, will deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not the Lender or the Administrative Agent is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.14(f)(ii)(1), Section 2.14(f)(ii)(2) and Section 2.14(f)(ii)(4)) will not be required if in the Lender’s or the Administrative Agent’s reasonable judgment such completion, execution or submission would subject the Lender or the Administrative Agent to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of the Lender.
28
(ii) Lender Agent will deliver to the Borrower and the Administrative Agent, on or prior to the date on which Lender becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of a Borrower), duly completed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.
(g) if a payment made to a Recipient under any Credit Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient will deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.14(g), “FATCA” will include any amendments made to FATCA after the date of this Agreement. The parties hereto hereby agree (i) that the Administrative Agent shall be entitled to make any withholding or deduction from payments under this Agreement to the extent necessary to comply with applicable law for which the Administrative Agent shall not have any liability, and (ii) to indemnify the Administrative Agent in accordance with the provisions set forth in this Agreement for any losses it may suffer due to the actions it takes to comply with such applicable law. The terms of this section shall survive the termination of this Agreement.
(h) Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it will update such form or certification, provide such successor form or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(i) Any Administrative Agent that (i) is a U.S. Person will deliver to the Borrower, on or prior to the date on which it becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of a Borrower), duly completed copies of IRS Form W-9 certifying that such Administrative Agent is exempt from U.S. federal backup withholding tax or (ii) is not a U.S. Person will deliver to the Borrower, on or prior to the date on which it becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), duly completed copies of (A) IRS Form W-8IMY evidencing its agreement with the Borrower to be treated as a U.S. Person and (B) IRS Form W-8ECI.
29
(j) If the Lender determines in its sole discretion exercised in good faith that it has received a refund (which for purposes of this paragraph shall include a credit received in lieu of a refund) of any Taxes as to which it has been indemnified pursuant to this Section 2.14 (including by the payment of additional amounts pursuant to this Section 2.14), it will pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made or additional amounts paid under this Section 2.14 with respect to the Taxes giving rise to such refund), net of all reasonable, documented, out-of-pocket expenses of such Recipient and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). The Borrower, upon the request of such Recipient, will repay to such Recipient the amount paid over pursuant to this Section 2.14(j) (plus any penalties, interest or other charges properly imposed by the relevant Governmental Authority) in the event that such Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph 2.14(j), in no event will the Recipient be required to pay any amount to the Borrower pursuant to this paragraph 2.14(j) the payment of which would place the Recipient in a less favorable net after-Tax position than the Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph will not be construed to require any Recipient to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.
(k) The Lender will indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to the Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting or expanding the obligation of the Borrower to do so), (ii) any Taxes attributable to the Lender’s failure to comply with the provisions of Section 9.6(g) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to the Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Credit Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Lender by the Administrative Agent will be conclusive absent manifest error. The Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to the Lender under any Credit Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 2.14(k).
(l) Each party’s obligations under this Section 2.14 will survive the resignation or replacement of the Administrative Agent, the termination of this Agreement, any assignment of right by, or the replacement of, a Recipient, and the repayment, satisfaction, or discharge of all obligations under any Credit Document.
30
2.15 Obligation to Mitigate. The Lender agrees that, as promptly as practicable after the officer of the Lender responsible for administering its Term Loans becomes aware of the occurrence of an event or the existence of a condition that would cause the Lender to become an Affected Lender or that would entitle the Lender to receive payments under Section 2.13 or 2.14, it will, to the extent not inconsistent with the internal policies of the Lender and any applicable legal or regulatory restrictions, use reasonable efforts (a) to make, issue, fund or maintain its Term Loans, including any Affected Loans, through another office of the Lender, or (b) to take such other measures as the Lender may deem reasonable, if as a result thereof the circumstances which would cause the Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to the Lender pursuant to Section 2.13 or 2.14 would be materially reduced and if, as determined by the Lender in its sole discretion, the making, funding or maintaining of such Commitment or Term Loans through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Commitment or Term Loans or the interests of the Lender; provided that the Lender will not be obligated to utilize such other office pursuant to this Section 2.15 unless the Borrower agrees to pay all reasonable out-of-pocket incremental expenses incurred by the Lender as a result of utilizing such other office as described above. A certificate as to the amount of any such expenses payable by the Borrower pursuant to this Section 2.15 (setting forth in reasonable detail the basis for requesting such amount) submitted by the Lender to the Borrower (with a copy to the Administrative Agent) will be conclusive absent manifest error.
2.16 No Extension of Maturity Date. The Maturity Date may not be extended except with the prior written consent of the Borrower and the Lender and with written notice to the Administrative Agent.
2.17 [Reserved].
Section 3. CONDITIONS PRECEDENT
3.1 Effective Date. This Agreement shall become effective on the date hereof (the “Effective Date”) The Initial Term Loan will be advanced on such date (the “Closing Date”) that conditions to such advance in this Section and in Section 3.2 shall have been satisfied or waived by the Lender, and the Borrower has delivered notice in accordance with Section 2.1(a).
(a) Credit Documents. The Administrative Agent and the Lender will have received a copy of each of the Credit Documents, in each case where applicable, executed and delivered by each party thereto.
(b) Organizational Documents; Incumbency; Resolutions; Good Standing Certificates. The Administrative Agent and Lender will have received:
| i. | Organizational Documents. A copy of each Organizational Document of the Borrower and the Parent and, in the case of the Borrower’s Certificate of Formation and the Parent’s Certificate of Incorporation, certified as of a recent date by the appropriate governmental official. |
| ii. | Incumbency Certificate. A signature and incumbency certificate of the officers or other authorized representatives of the Borrower and the Parent executing the Credit Documents referenced in Section 3.1(a). |
31
| iii. | Resolutions. Resolutions of the board of directors or similar governing body of the Borrower and the Parent approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents. |
| iv. | Good Standing Certificate. A certificate of status, compliance, good standing or like certificate from the applicable Governmental Authority of the jurisdiction of incorporation, registration, organization or formation of the Borrower and the Parent. |
| v. | Formalities Certificate. A certificate from the Borrower and the Parent (signed by an authorized signatory) dated the Closing Date: (A) appending a copy of the documents specified in clauses i, ii, iii and iv above and (B) certifying that each copy document specified in clause i and iv above is correct, complete, in full force and effect and has not been amended or superseded as of a date no earlier than the Closing Date. |
(c) Financial Statements. The Lender will have received the Historical Financial Statements, in each case prepared in accordance with GAAP.
(d) Lien Searches. The Lender will have received the results of customary lien searches (as applicable) with regard to the Borrower requested no less than 15 days prior to the Closing Date.
(e) Collateral. The Collateral Agent will have received:
(i) Filings, etc. Except to the extent a later date is specified therefor in the applicable Collateral Document(s) and/or Section 5.13, all other documents and instruments necessary to establish and perfect the Collateral Agent’s first priority (subject to Permitted Liens) Lien in the Collateral, in each case, executed and delivered (if applicable, in proper form for filing) by the Borrower.
(ii) Consents. Lender shall have received copies of the executed Consents, in form and substance satisfactory to Lender.
(f) Opinion of Counsel. The Administrative Agent, the Lender and their respective counsel will have received copies of (and the Borrower hereby instructs such counsel to deliver such opinions to the Agents and the Lender) a customary legal opinion, dated as of the Closing Date, of Donald A. Stern, Esq., as counsel to the Borrower and the Parent.
(g) “Know-Your-Customer.” The Administrative Agent and the Lender will have received all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations including the PATRIOT Act.
32
(h) Fees and Expenses. The upfront fee payable pursuant to Section 2.7 and all costs, fees, expenses (including reasonable, documented, out-of-pocket legal fees and expenses of Sidley Austin LLP, as legal counsel to the Lender, and Holland & Knight LLP, as legal counsel to the Agents) and other compensation payable to the Agents and the Lender pursuant to this Agreement, the Agent Fee Letter or the other Credit Documents will have been paid (or will concurrently be paid) to the extent then due.
(i) Pre-Funding. On or prior to the Effective Date, the following documents shall be delivered: (i) the Certification of D.F. King & Co., Inc., as exchange agent for the Exchange Offer, dated on or prior to June 29, 2026, in form heretofore approved by Lender, (ii) the fully-executed Escrow Agreement, dated June 29, 2026, among Parent, the Lender and U.S. Bank, National Association, as Escrow Agent, and (iii) the Payment Direction Letter, executed by the Borrower.
(j) Lender has received wire confirmations or other evidence confirming that all wire transfers contemplated by Section 3.1(h) and Section 3.1(i) have been received.
3.2 Conditions to Funding Term Loans on the Closing Date. The obligation of the Lender to make its Initial Term Loan on the Closing Date is subject to the satisfaction, or waiver in accordance with Section 9.5, of the following conditions precedent (and the Lender’s funding of the Initial Term Loans shall be deemed evidence that all such conditions have been satisfied or waived):
(a) Borrowing Notice. The Administrative Agent will have received a fully executed and delivered Borrowing Notice as required pursuant to Section 2.1.
(b) No Adverse Proceedings. There shall be no Adverse Proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower or the Parent that would materially and adversely affect any transaction contemplated under the Credit Documents or the ability of the Borrower or the Parent to perform its obligations under the Credit Documents or which would otherwise reasonably be expected to have a Material Adverse Effect.
(c) No Material Adverse Effect. Since December 31, 2025, there shall not have occurred any event or condition of any character that has had, or is reasonably likely to have, a Material Adverse Effect.
(d) Representations and Warranties. As of the Closing Date, the representations and warranties contained herein and in the other Credit Documents will be true and correct in all material respects (except for those representations and warranties that are conditioned by materiality, which will be true and correct in all respects) both immediately before and after the funding of the Term Loans, on and as of the Closing Date, to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties will have been true and correct in all material respects (except for those representations and warranties that are conditioned by materiality, which will have been true and correct in all respects) on and as of such earlier date.
33
(e) No Default or Event of Default. Both immediately before and after the making of the Initial Term Loans on the Closing Date, no Default or Event of Default shall have occurred and be continuing.
(f) Consummation of Exchange Offer and Repayment of Parent 2026 Notes.
The Parent shall have delivered to Lender a letter in the form, and from Alston & Bird LLP or other person or entity, heretofore approved by Lender, to the effect that the Exchange Offer has been consummated, and all cash due to Parent noteholders who accepted the Exchange Offer, and all cash due to Parent noteholders who did not accept the Exchange Offer, has been paid to the respective exchange agent and paying agent for the benefit of the applicable noteholders.
For purposes of determining compliance with the conditions specified in Sections 3.1 and 3.2, the Agent and the Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender or Agent unless the Agent shall have received notice from the Lender or Agent prior to the proposed Closing Date, specifying its objection thereto, provided that if the Closing Date has not occurred by July 1, 2026, then this Agreement shall terminate and be of no further force and effect.
Section 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lender and the Agent to enter into this Agreement and to induce the Lender to make the Term Loans thereby, the Loan Parties (or solely the Borrower, as applicable) represents and warrants to the Lender and, the Agent on the Effective Date that:
4.1 Organization; Requisite Power and Authority; Qualification. The Loan Parties (a) are duly formed and (if applicable) registered, validly existing and in good standing under the laws of the jurisdiction of its formation, registration and/or incorporation, (b) have all requisite organizational power and authority to (i) own and operate its properties and to carry on its business as now conducted and as proposed to be conducted, (ii) to enter into the Credit Documents and (iii) to carry out the transactions contemplated hereby and thereby, and (c) are qualified to do business and in good standing as a foreign entity in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and would not be reasonably expected to have, a Material Adverse Effect.
4.2 Due Authorization. The execution, delivery and performance of the Credit Documents have been duly authorized by all necessary action on the part of the Loan Parties.
34
4.3 No Conflict; Government Consents.
(a) No Conflict with Organizational Documents, Law or Contractual Obligations; No Creation of Liens. The execution, delivery and performance by the Loan Parties of the Credit Documents and the consummation of the transactions contemplated thereby do not (i)(1) violate any of the Organizational Documents of the Loan Parties or (2) otherwise require any approval of any stockholder, member or partner of the Loan Parties, except for such approvals or consents which have been obtained or made; (ii) violate any provision of any law, rule, regulation, order, judgment or decree of any Governmental Authority applicable to or otherwise binding on the Loan Parties, except to the extent such violation would not reasonably be expected to have a Material Adverse Effect; (iii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under, or otherwise require any approval or consent of any Person under, (x) the Fund Documents or any other Contractual Obligation of the Loan Parties, except for such approvals or consents which have been obtained or made or the failure of which to obtain or make would not reasonably be expected to have a Material Adverse Effect or (y) any Indebtedness, except to the extent such conflict, breach or default would not reasonably be expected to have a Material Adverse Effect; or (iv) result in or require the creation or imposition of any Lien upon any of the properties or assets of the Loan Parties (other than any Liens created under any of the Credit Documents in favor of the Lender, on behalf of the Secured Parties and Permitted Liens).
(b) Governmental Consents. The execution, delivery and performance by the Loan Parties of the Credit Documents and the consummation of the transactions contemplated by the Credit Documents do not and will not require any registration with, consent, license, permit or approval of, or notice to, or other action to, with or by, any Governmental Authority, other than those that have been obtained or made or the failure of which to obtain or make would not reasonably be expected to have a Material Adverse Effect.
4.4 Binding Obligation. Each Credit Document has been duly executed and delivered by the Loan Parties and is the legally valid and binding obligation of the Loan Parties, enforceable against the Loan Parties in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by general equitable principles, regardless of whether considered in a proceeding in equity or at law and principles of good faith and fair dealing.
4.5 Historical Financial Statements. The Historical Financial Statements were prepared in conformity with GAAP applied on a consistent basis throughout the periods covered thereby, except as may be indicated in the notes thereto, and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments.
4.6 No Material Adverse Effect. Except as set forth on Schedule 4.6, since December 31, 2025, no event or change has occurred that has caused or would reasonably be expected to cause, individually or in the aggregate, a Material Adverse Effect.
4.7 Adverse Proceedings. There are no Adverse Proceedings pending or, to the best of the knowledge of the Loan Parties, threatened against the Loan Parties or any property of the Loan Parties which Adverse Proceedings, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The Loan Parties are not subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, provincial, territorial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
35
4.8 Payment of Taxes. Except as would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect, the Loan Parties have timely filed (or obtained valid extensions) with the appropriate federal, state, local and foreign taxing authorities all tax returns, information returns and reports that were required to be filed and have timely paid all Taxes owed by, levied or imposed upon them or their properties, income or assets, whether or not shown on such tax returns or reports, except those which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as adequate reserve or other appropriate provision, as may be required pursuant to GAAP has been made therefor. Except as would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect, no Responsible Officer of the Loan Parties has any knowledge of any proposed Tax assessment against the Loan Parties with respect to Taxes that is not being actively contested by the Loan Parties in good faith and by appropriate proceedings; provided that such reserves or other appropriate provisions, if any, as will be required in conformity with GAAP will have been made or provided therefor. No claims or investigations are being, or are reasonably likely to be, made or conducted against the Loan Parties with respect to Taxes such that upon adverse determination of such claim or investigation such adverse determination would have, or would be reasonably likely to have, a Material Adverse Effect. The Loan Parties are resident for Tax purposes only in the United States.
4.9 Ownership of Assets. Each Loan Party has good title to all of its material properties and assets, including, without limitation, each Portfolio Investment. All such properties and assets are free and clear of Liens, except for Permitted Liens.
4.10 Governmental Regulation. The Loan Parties are not required to be registered as an “investment company” pursuant to the Investment Company Act of 1940.
4.11 Margin Stock. The Loan Parties are not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Term Loans will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors or any other regulation thereof or to violate the Exchange Act.
4.12 ERISA. Each Loan Party satisfies an exception under the Plan Asset Regulations which prevents the assets of the Loan Parties from being subject to Title I of ERISA or Section 4975 of the Internal Revenue Code. Except as would not reasonably be expected to result in a Material Adverse Effect, each Loan Party has not established, does not maintain, and has no obligation with respect to, any Employee Benefit Plan. Assuming no portion of the assets used by the Lender contemplated by the Credit Documents constitute Plan Assets, the transactions contemplated by the Credit Documents do not constitute a “non-exempt prohibited transaction” under Section 406(a) of ERISA or Section 4975(c)(1)(A)-(D) of the Internal Revenue Code.
4.13 Solvency. On the Closing Date, after giving effect to the transactions contemplated pursuant to this Agreement including the funding of the Term Loans on such date, and giving effect to the application of the proceeds thereof, the Loan Parties, on a consolidated basis with its Subsidiaries, is Solvent.
36
4.14 Compliance with Laws.
(a) Generally. Each Loan Party is in compliance with all applicable Laws in respect of the conduct of its business and the ownership of its property, except such non-compliance that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
(b) Anti-Terrorism Laws, Etc. Without limiting clause (a) above, neither the Loan Parties nor any of its Controlled Entities or any of their respective directors or officers (i) is located, organized or resident in a Sanctioned Country, (ii) is in violation of any Anti-Terrorism Law or Export Controls, (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law or Export Controls, (iv) is a Sanctioned Person, (v) is engaged in any activity that would reasonably be expected to result in the Loan Parties or any of its Controlled Entities or any of their respective directors or officers being designated as a Sanctioned Person, (vi) is subject to or has received notice of any proceeding or investigation by any Governmental Authority in connection with any violation by the Loan Parties or any Subsidiary, or any director or officer, of any Anti-Terrorism Law or Export Controls or (vii) has been convicted by any Governmental Authority of a violation of any Anti-Terrorism Law or Export Controls. Neither the Loan Parties nor any of its Controlled Entities (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Sanctioned Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to any Anti-Terrorism Law.
(c) Anti-Corruption Laws, Etc. During the five (5) years prior to the Closing Date, there has been no action taken by the Loan Parties or any of its Controlled Entities or any officer, director, employee, agent, representative, sales intermediary, or other third party of the Loan Parties or any of its Controlled Entities, in each case, acting on behalf of the Loan Parties or any of its Controlled Entities in violation of any applicable Anti-Corruption Laws. Neither the Loan Parties or any of its Controlled Entities has been convicted of violating any Anti-Corruption Laws or are subject to any investigation by a Governmental Authority for violation of any applicable Anti-Corruption Laws. There is no suit, litigation, arbitration, claim, audit, action, proceeding or investigation pending or threatened against the Loan Parties or any of its Controlled Entities related to any applicable Anti-Corruption Laws, before or by any Governmental Authority. Neither the Loan Parties nor any of its Subsidiaries has made a voluntary, directed, or involuntary disclosure to any Governmental Authority with respect to any alleged act or omission arising under or relating to any noncompliance with any Anti-Corruption Laws. In the five (5) years prior to the Closing Date, neither the Loan Parties nor any of its Subsidiaries has received any notice, request or citation for any actual or potential noncompliance with Anti-Corruption Laws.
(d) Use of Proceeds. The Loan Parties will not, directly or indirectly, use the proceeds of any Term Loan hereunder, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity in any manner that could reasonably be expected to constitute or give rise to a violation of any Sanctions by any person, including any party hereto.
37
4.15 Disclosure. None of the written information and data (other than any projections and information of a forward-looking nature) furnished to the Agent or the Lender by or on behalf of the Loan Parties for use in connection with the transactions contemplated hereby, when taken as a whole, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained therein taken as a whole not materially misleading in light of the circumstances under which such statements were made (after giving effect to all supplements and updates to such written information and data), in each case, furnished after the date on which such written information or data was originally delivered. Any projections and information of a forward-looking nature furnished to the Agent or the Lender by or on behalf of the Loan Parties have been prepared in good faith based upon assumptions believed by the Loan Parties to be reasonable at the time made (it being understood and agreed that such projections and information of a forward-looking nature are not to be viewed as a guarantee of financial performance or achievement, that such projections and information of a forward-looking nature are subject to significant uncertainties and contingencies, many of which are beyond the Loan Parties’ control, and that actual results may differ from the projections and such differences may be material).
4.16 Perfection of Security Interests in the Collateral. Upon execution and delivery of the Collateral Documents, the Collateral Documents will create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens will be first priority Liens.
4.17 Use of Proceeds. The Loan Parties have used (or will use) the proceeds of the Term Loans in accordance with Section 2.3.
4.18 No Default. No Default or Event of Default has occurred and is continuing.
4.19 Fiscal Year. The fiscal year of the Loan Parties is the calendar year.
Section 5. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that until the Termination Conditions have been satisfied, it shall, and shall cause each of the Loan Parties to, perform all covenants in this Section 5.
5.1 Financial Statements; Notices and Other Reports. The Borrower will deliver to the Administrative Agent:
(a) Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year commencing with the Fiscal Year ended December 31, 2025, (i) a report for the Parent setting forth, as of the end of such Fiscal Year, the balance sheet and income statement of the Parent, together with the unqualified opinion of a firm of nationally-recognized independent certified public accountants, based on an audit using generally accepted auditing standards, that such financial statements were prepared in accordance with GAAP and present fairly the financial condition and results of operations of the Parent (in each case without qualification, exception or any other statement which has the effect of modifying the opinion given therein) and (ii) a report for the Borrower setting forth, as of the end of such Fiscal Year, the balance sheet and income statement of the Borrower, together with an officer’s certificate to the effect that, to the best of such officer’s knowledge, such financial statements were prepared in accordance with GAAP and present fairly the financial condition and results of operations of the Borrower.
38
(b) Quarterly Financial Statements. As soon as available, and in any event within ninety (90) days after the end of each of the first three Fiscal Quarters of each Fiscal Year, commencing with the Fiscal Quarter ended June 30, 2026, an unaudited report for the Borrower setting forth, as of the end of such Fiscal Quarter, the balance sheet and income statement of the Borrower.
(c) Statements of Reconciliation after Change in Accounting Principles. If, as a result of any change in GAAP from those used in the preparation of the Historical Financial Statements, the financial statements of the Borrower delivered pursuant to this Section 5.1 will differ in any material respect from the financial statements that would have been delivered had no such change in GAAP occurred, then the Borrower will deliver, together with the first delivery of such financial statements after such change, one or more statements of reconciliation between generally accepted accounting principles as in effect on the date of such delivery and those used in the preparation of the previously provided financial statement immediately prior to such change in GAAP.
(d) Accountants’ Report. Promptly upon receipt thereof, copies of all final management letters identifying a material weakness or significant deficiency submitted by the independent certified public accountants referred to in Section 5.1(a)(i) in connection with each annual, interim or special audit or review of any type of the financial statements or related internal control systems of the Parent made by such accountants.
(e) Reports to Borrower. Promptly following the delivery thereof to the Borrower, the Borrower will provide to the Administrative Agent (a) a copy of the reports of all Portfolio Investments (including any valuation information included therewith) and (b) copies of all other financial statements, material appraisal reports, material notices, and other material matters at any time or from time to time and furnished to the Borrower by the Funds.
(f) Compliance Certificates. Together with each delivery of financial statements of the Loan Parties pursuant to Sections 5.1(a) and 5.1(b), a duly executed and completed Compliance Certificate as at the date of the relevant financial statements.
(g) Notice of Default. Promptly upon a Responsible Officer obtaining knowledge of the occurrence of any Default or Event of Default, a certificate of the Loan Parties specifying the nature and period of existence of such Default or Event of Default and what action the Loan Parties have taken, is taking and/or proposes to take with respect thereto.
39
(h) Notice of Litigation and Judgments. Promptly upon a Responsible Officer become aware of:
(i) the institution of, or threat in writing of, any Adverse Proceeding pending or threatened against the Loan Parties not previously disclosed in writing by the Loan Parties to the Administrative Agent; or
(ii) any material development in any Adverse Proceeding pending against the Loan Parties or any property of the Loan Parties or the entry of any judgment in respect of any such Adverse Proceeding;
in each case that would be reasonably expected to result in a Material Adverse Effect, written notice thereof by the Loan Parties together with such other information as may be reasonably available to the Loan Parties to enable the Lender and its counsel to evaluate such matters.
(i) Notices Related to OFAC, Etc. The Loan Parties will promptly notify the Lender if (i) a Responsible Officer of any Loan Party has knowledge that the Loan Parties or any of their Subsidiaries or any of their respective directors or officers is listed on the OFAC Lists or otherwise becomes a Sanctioned Person, (ii) the Loan Parties or any of their Subsidiaries or to the knowledge of the Loan Parties any of their respective directors or officers is convicted on, pleads nolo contendere to, is indicted on, or is arraigned and held over on, charges involving money laundering or predicate crimes to money laundering, or (iii) the Loan Parties or any of their Subsidiaries has knowledge that it or any of its directors or officers is subject to or has received notice of any proceeding or investigation by any Governmental Authority in connection with any violation by the Loan Parties or any of their Subsidiaries of Anti-Terrorism Laws.
(j) Other Information. The Loan Parties will deliver to the Administrative Agent, promptly upon written request therefor, such other information and data with respect to the Loan Parties and/or the Portfolio Investments as the Administrative Agent may from time to time reasonably request (including on behalf of the Lender).
5.2 Existence. The Loan Parties will at all times preserve and keep in full force and effect its existence and all rights (charter and statutory), franchises, licenses, permits and approvals necessary in the normal conduct of its business.
5.3 Payment of Taxes and Claims. The Loan Parties will timely file all tax returns, information returns and reports required to be filed and pay all Taxes when due except (a) those which are being contested in good faith; (b) adequate reserves have been maintained for the payment of such Tax and the costs required to contest them; (c) such payment can be lawfully withheld without material penalty and (d) any such failure to pay would not, or would not reasonably likely to have a Material Adverse Effect.
40
5.4 Maintenance of Properties. The Loan Parties will act prudently and in accordance with customary industry standards in managing or operating its assets, properties, business, and investments, except where failure to do so would not reasonably be expected to result in a Material Adverse Effect; the Borrower will keep in good working order and condition, ordinary wear and tear excepted, all of its assets and properties which are necessary to the conduct of their business, except where failure to do so would not reasonably be expected to result in a Material Adverse Effect
5.5 Insurance. The Loan Parties will maintain insurance on its present and future properties, assets, and businesses against such casualties, risks, and contingencies, and in such types and amounts, as are consistent with customary practices and standards of its industry and the failure of which to maintain would reasonably be expected to have a Material Adverse Effect.
5.6 Books and Records; Inspections. The Loan Parties will permit the Agent and the Lender and, subject to compliance with Section 9.17, their respective authorized representatives to inspect, copy and take extracts from its financial and accounting records, all upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested; provided that unless an Event of Default has occurred and be continuing, the Administrative Agent shall not exercise such rights more often than one (1) time during any calendar year.
5.7 Compliance with Laws. The Loan Parties will comply with the requirements of all applicable Laws, rules, regulations and orders of any Governmental Authority (including ERISA, but excluding Export Controls, Anti-Terrorism Laws and Anti-Corruption Laws), noncompliance with which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Loan Parties will comply with the requirements of all Export Controls, Anti-Terrorism Laws and Anti-Corruption Laws.
5.8 Anti-Terrorism Laws and Anti-Corruption Laws. The Loan Parties will maintain in effect and enforce, or remain subject to, policies, procedures and internal controls reasonably designed to ensure compliance by the Loan Parties and their directors, officers, and employees with applicable Anti-Terrorism Laws and Anti-Corruption Laws.
5.9 Further Assurances. At any time or from time to time upon the request of the Agent, the Loan Parties will, at the Loan Parties’ expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Agent may reasonably request in order to ensure that the Obligations are secured by the Collateral.
5.10 Use of Proceeds. All proceeds of the Term Loans will be used in accordance with Section 2.3 (including that no part of the proceeds of any Term Loan will be used, whether directly or indirectly, for any purpose that would entail a violation of Regulation T, Regulation U or Regulation X).
5.11 Collateral Account. The Loan Parties shall ensure that all Realization Proceeds are deposited directly into a Collateral Account (or held in trust for the Lender and promptly deposited into a Collateral Account if otherwise received). The Loan Parties shall be permitted to release any amounts on deposit in any Collateral Account to the extent (a) such amount are to be applied to pay or prepay any Obligations, (b) such amounts are permitted to be netted from any Realization Proceeds in determining the amount of the related Net Realization Proceeds or (c) during the Recycling Period, to apply Collateral Asset Repayments in accordance with Section 2.9(b), in each case with the prior written approval of the Lender to the extent required thereunder.
41
5.12 Bankruptcy Remoteness. Each Loan Party shall:
(a) (i) file its own tax returns, if any, as may be required under applicable law and (ii) pay any Taxes so required to be paid under applicable Law, in the case of both of clauses (i) and (ii), unless the same are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves in accordance with GAAP are being maintained by the Loan Parties, or to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect;
(b) not commingle its assets with assets of any other Person and not hold out its credit or assets as being available to satisfy the obligations of others;
(c) conduct its business in its own name and strictly comply with all organizational formalities necessary to maintain its separate existence (other than as appropriate for tax purposes) (and each Loan Party hereby represents that all such formalities have been complied with since the such Loan Parties’ formation);
(d) maintain books and records separate from any other Person;
(e) maintain separate financial statements;
(f) pay its own liabilities only out of its own funds;
(g) maintain an arm’s-length relationship with its Affiliates, it being understood and agreed that the transactions contemplated in the Credit Documents meet the requirements of this clause (g);
(h) hold itself out as a separate Person and not as a department or division of any other Person (except to the extent treated as a disregarded entity for U.S. federal and applicable state income tax purposes), and not hold out its credit or assets as being available to satisfy the obligations of others;
(i) allocate fairly and reasonably shared expenses (including shared office space and services performed by an employee of an Affiliate, if any) among the Persons sharing such expenses;
(j) use separate stationery, invoices and checks and not of any other entity (unless such entity is clearly designated as being the Loan Parties’ manager or agent);
(k) not pledge its assets as security for the obligations of any other person (other than pursuant to the Credit Documents);
(l) correct any known misunderstanding regarding its separate identity;
(m) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities;
(n) not take any Material Action without the consent of the Lender;
42
(o) not have any employees; and
(p) not assume or guarantee any of the liabilities of any of its Affiliates.
5.13 Post-Closing Matters. The Loan Parties will take each of the actions set forth on Schedule 5.13 within the time period prescribed therefor on such schedule.
Section 6. NEGATIVE COVENANTS
The Borrower covenants and agrees that until the Termination Conditions are satisfied, it shall, and shall cause each of the Loan Parties to, perform all covenants in this Section 6.
6.1 Indebtedness. The Loan Parties will not, directly or indirectly, create, incur, assume or guaranty, or otherwise become directly or indirectly liable with respect to any Indebtedness, except the Obligations.
6.2 Liens. The Loan Parties will not, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any of its property or assets, whether now owned or hereafter acquired, or any income or profits therefrom, except the following:
(a) Liens securing the Obligations;
(b) Liens for Taxes, assessments or governmental charges not yet due or which are being contested in good faith and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP in all material respects;
(c) Liens (A) of a collection bank arising under Section 4-208 or 4-210 of the Uniform Commercial Code on the items in the course of collection and (B) in favor of a banking or other financial institution encumbering deposits or other funds maintained with a financial institution (including the right of set-off) and that are within the general parameters customary in the banking industry; or
(d) judgment Liens not constituting an Event of Default under Section 7.1(g);
(e) the Liens permitted pursuant to clauses 6.2(a) through 6.2(c) above, together with those Liens identified on Schedule 6.2, being the “Permitted Liens”.
6.3 No Further Negative Pledges. The Loan Parties will not enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, to secure the Obligations other than restrictions imposed by reason of any applicable Law, rule, regulation or order or are required by any Governmental Authority having jurisdiction over the Loan Parties.
6.4 Distributions.
(a) The Borrower will not, directly or indirectly, pay or make any Restricted Distribution other than (i) Tax Distributions, (ii) a Restricted Distribution in the amount of the Initial Term Loan to be paid on the Closing Date.
43
(b) The Loan Parties will procure that no Portfolio Investment will (i) make any dividend or other distribution, direct or indirect, on account of any shares of any class of its Equity Interests now or hereafter owned by the Loan Parties other than to the Borrower or the applicable Subsidiary Guarantor.
6.5 Investments. The Borrower will not, directly or indirectly, make any Investment in any Person, except:
(a) cash and Cash Equivalents; and
(b) it’s Portfolio Investment in the Funds and the Subsidiary Guarantors.
6.6 Fundamental Changes; Disposition of Assets.
(a) The Loan Parties shall not take any actions to merge or consolidate with or into any Person.
(b) The Loan Parties shall not take any actions, or permit any other Person to take any actions, which would cause the Loan Parties to fail to (i) conduct and present itself as a separate entity and maintain reasonable business organization formalities, (ii) maintain separate books and records, (iii) conduct all transactions with Affiliates on an arm’s length basis, and (iv) not commingle its funds with funds of other Persons, including Affiliates.
(c) The Loan Parties shall not, directly or indirectly, dispose of all or any of their assets.
6.7 Business Activities. The Loan Parties shall not engage in any business or activity other than as permitted in accordance with their Organizational Documents.
6.8 Organizational Documents. The Loan Parties shall not alter, amend, modify, terminate, or change any provision of its Organizational Documents if any such proposed amendment would reasonably be expected to have a Material Adverse Effect or otherwise be materially adverse to the rights, titles, first priority (subject only to Permitted Liens) security interests and Liens, and powers and privileges of the Lender. In the event any Organizational Documents or any provision thereof of the Loan Parties is altered, amended, modified, terminated in any respect whatsoever the Loan Parties shall promptly provide written notice thereof to the Lender, in the case of the Borrower, the Administrative Agent and shall provide the Lender, in the case of the Borrower, the Administrative Agent with copies of each executed, filed or otherwise effective document relating thereto.
6.9 Fiscal Year. The Loan Parties will not make any change in Fiscal Year or any material change to its method of accounting without delivering prior written notice to Lender, and the in the case of the Borrower, the Administrative Agent, of such proposed change.
6.10 ERISA Compliance. The Loan Parties shall not (i) establish, maintain or contribute to any Pension Plan or Multiemployer Plan or (ii) have any liabilities with respect to any such plans that is reasonably likely to result in a Material Adverse Effect. Assuming no portion of the assets used by the Lender contemplated by the Credit Documents constitute Plan Assets, no Loan Party shall take any action that would cause it to fail to meet an exception under the Plan Asset Regulations which prevents the assets of the Loan Parties from being subject to Title I of ERISA or Section 4975 of the Internal Revenue Code.
44
6.11 Holding Company Covenant with respect to Holdings. The Loan Parties shall not (i) engage, directly or indirectly, in any business, other than the transactions contemplated by the Credit Documents and the actions required or permitted to be performed under Section 5.12 or (ii) except otherwise permitted in the Credit Documents, own any asset or property other than the Collateral and the related assets and incidental personal property necessary for the ownership or operation of these assets.
Section 7. EVENTS OF DEFAULT
7.1 Events of Default. Each of the events referred to in clauses (a) through (i) of this Section 7.1 shall constitute an “Event of Default”:
(a) Failure to Make Payments When Due. Failure by (x) the Loan Parties to pay (i) when due any installment of principal of any Term Loan, whether at stated maturity, by acceleration or otherwise or (ii) any interest on any Term Loan or any fee or any other amount due hereunder within three (3) Business Days after the date due or (y) the Parent to pay when due any amounts owing under the Guaranty; or
(b) Breach of Negative Covenants. Failure of the Loan Parties to perform or comply with any term or condition contained in Section 6, or
(c) Breach of Representations, Etc. Any representation, warranty, certification or other statement made or deemed made by the Loan Parties or the Parent in any Credit Document or in any statement or certificate at any time given by the Loan Parties or the Parent, as applicable, in writing pursuant to the terms of the Credit Documents was false in any material respect (or, to the extent such representation and warranty contains qualifications as to materiality, it was false in any respect) as of the date made or deemed made; or
(d) Breach of Other Covenants. The (i) Loan Parties defaults in the performance of or compliance with any covenant contained in Sections 5.1(h), Section 5.2 or Section 5.12, or (ii) Borrower or the Parent defaults in the performance of or compliance with any other covenant in this Agreement or in any of the other Credit Documents, other than any such covenant referred to in sub-clause (i) or clause (b) above, and such default is not remedied, cured or waived within thirty (30) days after the earlier to occur of the date on which a Responsible Officer has knowledge of such default and the date of receipt by the Loan Parties or the Parent, as applicable, of notice from the Lender of such default; or
(e) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) A court of competent jurisdiction enters a decree or order for relief in respect of the Loan Parties or the Parent in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief is granted under any applicable law; or (ii) an involuntary case is commenced against the Loan Parties or the Parent under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, administrative receiver, administrator, examiner, trustee, monitor, custodian or other officer having similar powers over the Loan Parties or the Parent, or over all or a substantial part of its property, is entered; or there occurs the involuntary appointment of an interim receiver, liquidator, administrative receiver, administrator, compulsory manager, trustee or other custodian of the Loan Parties or the Parent for all or a substantial part of its property; or a warrant of attachment, execution, expropriation, enforcement of security, distress or execution or similar process is issued against any substantial part of the property of the Loan Parties or the Parent, and any such event described in this clause (ii) continues for sixty (60) days without having been dismissed, bonded or discharged; or
45
(f) Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) The Loan Parties or the Parent has an order for relief entered with respect to it or commences a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or consents to the appointment of or taking possession by a receiver, liquidator, administrative receiver, administrator, examiner, trustee, monitor, custodian or other officer for all or a substantial part of its property; or the Loan Parties or the Parent makes a general assignment for the benefit of creditors; or (ii) the Loan Parties or the Parent becomes unable, or fails generally, or admits in writing its inability, to pay its debts as such debts become due; or the board of directors (or similar governing body) the Loan Parties or the Parent (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the actions referred to herein or in Section 7.1(e); or
(g) Judgments and Attachments. Any final money judgment, writ or warrant of attachment or similar process involving in any individual case in an amount in excess of $1,000,000, in each case to the extent not covered by insurance (as to which a solvent and unaffiliated insurance company has acknowledged and not denied coverage), is entered or filed against the Loan Parties or any of its assets and remains undischarged, unvacated, unbonded, unstayed or effectively unwaived for a period of sixty (60) consecutive days; or
(h) Dissolution. Any order, judgment or decree is entered against the Loan Parties or the Parent decreeing the involuntary dissolution, winding-up, liquidation, striking-off or split up of the Loan Parties or the Parent and such order remains undischarged, unstayed or effectively unwaived for a period in excess of sixty (60) consecutive days; or
(i) Collateral Documents and other Credit Documents. At any time after the execution and delivery thereof:
(i) this Agreement, or any other Credit Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations in accordance with the terms hereof) or is declared null and void, or the Collateral Agent (for the benefit of the Lender) does not have or ceases to have a valid and perfected Lien in any Collateral with the priority required by the relevant Collateral Document, in each case, for any reason other than actions taken by or on behalf of the Collateral Agent, the Lender or any Secured Party; or
46
(ii) the Loan Parties or the Parent contests the validity or enforceability of any Credit Document in writing or denies in writing that it has any further liability under any Credit Document; or
7.2 Remedies upon an Event of Default.
(a) Upon the occurrence of any Event of Default, other than pursuant to Section 7.1(e) or 7.1(f), at the request of the Lender, upon notice to the Loan Parties by the Lender (with a copy to the Agents):
(i) the Commitments will immediately terminate or be reduced (as specified by the Lender);
(ii) the aggregate principal of all Term Loans, all accrued and unpaid interest thereon, all fees and all other Obligations under this Agreement and the other Credit Documents will become due and payable immediately, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Loan Parties; and
(iii) the Lender may, and may cause the Collateral Agent to, exercise any and all of its other rights and remedies under applicable Law (including any applicable UCC) or at equity, hereunder and under the other Credit Documents;
provided that upon an Event of Default pursuant Section 7.1(e) or 7.1(f), the Commitments of the Lender shall automatically terminate and the unpaid principal amount of all outstanding Term Loans and all interest and other amounts as aforesaid shall automatically become due and payable.
7.3 Application of Proceeds. Notwithstanding anything to the contrary contained in this Agreement or any other Credit Document, upon the occurrence and during the continuance of an Event of Default and after the acceleration of the principal amount of any of the Term Loans hereunder:
(a) the Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by the Lender or the Collateral Agent from or on behalf of the Borrower, and, as between the Borrower on the one hand and the Administrative Agent, the Collateral Agent and the Lender on the other, the Administrative Agent will have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as the Lender and the Administrative Agent may deem advisable and consistent with this Agreement and in accordance with Section 7.3(b) notwithstanding any previous application by Lender or the Administrative Agent; and
47
(b) any and all payments received by any Secured Party (other than through the Administrative Agent), including proceeds of Collateral, will be applied:
(i) first, to all fees, costs, indemnities, liabilities, obligations and expenses owing to any Agent under this Agreement or the other Credit Documents;
(ii) second, to all fees, costs, indemnities, liabilities, obligations and expenses owing to the Lender under this Agreement or the other Credit Documents;
(iii) third, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts);
(iv) fourth, to the principal amount of the Term Loans and other Obligations;
(v) fifth, to any other Indebtedness or obligations of the Borrower owing to the Agent, the Lender or any other Secured Party under the Credit Documents; and
(vi) sixth, to the Borrower or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct.
In carrying out the foregoing, (a) amounts received will be applied in the numerical order provided until exhausted prior to the application to the next succeeding category and (b) each of the Persons entitled to receive a payment in any particular category will receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.
Section 8. AGENTS
8.1 Appointment and Duties.
(a) Appointment of Agents. The Lender hereby appoints Alter Domus (US) LLC (together with any successor Administrative Agent and Collateral Agent pursuant to Section 8.8(a)) as the Administrative Agent and the Collateral Agent hereunder and authorizes the Agent to (i) execute and deliver the Credit Documents and accept delivery thereof on its behalf from the Borrower, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as are expressly delegated the Agent under such Credit Documents and (iii) exercise such powers as are reasonably incidental thereto. In furtherance of the foregoing, the Lender hereby irrevocably appoints and authorizes the Collateral Agent to act as the agent of (and to hold any security interest created by the Collateral Documents for and on behalf of or in trust for) the Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by the Borrower to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. The Agent (and any co-agents, sub-agents and attorneys-in-fact appointed by the Agent pursuant to Section 8.4), will be entitled to the benefits of all provisions of this Section 8, as though such co-agents, sub-agents and attorneys-in-fact were an “Agent” under the Credit Documents as if set forth in full herein with respect thereto. The provisions of this Section 8 are solely for the benefit of the Agent, and the Lender and the Borrower will have no rights as a third party beneficiary of any of the provisions thereof, other than Section 8.8. In performing its functions and duties hereunder, the Agent will act solely as an agent of the Lender and does not assume and will not be deemed to have assumed any obligation towards or relationship of agency or trust with or for the Borrower.
48
(b) Duties as Collateral and Disbursing Agent. Without limiting the generality of clause (a) above, each of the Administrative Agent and the Collateral Agent, as applicable, will each have the right and authority (to the exclusion of the Lender), and is hereby authorized, to (i) act as the disbursing and collecting agent for the Lender with respect to all payments and collections arising in connection with the Credit Documents (including in any proceeding described in Section 7.1(e) or 7.1(f) or any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Credit Document to any Secured Party is hereby authorized to make such payment to the Agent, (ii) file and prove claims and file other documents necessary or desirable to allow the claims of the Secured Parties with respect to any Obligation in any proceeding described in Section 7.1(e) or 7.1(f) or any other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Person), (iii) act as collateral agent for each Secured Party for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Credit Documents, (vi) except as may be otherwise specified in any Credit Document, exercise all remedies given to the Agent and the other Secured Parties with respect to the Borrower and/or the Collateral, whether under the Credit Documents, applicable Law or otherwise and (vii) execute any amendment, consent or waiver under the Credit Documents on behalf of the Lender that has consented in writing to such amendment, consent or waiver; provided, however, that the Agent hereby appoints, authorizes and directs the Lender to act as collateral sub-agent for the Agent and the Lender for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by the Borrower with, and cash and cash equivalents held by, the Lender, and may further authorize and direct the Lender to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to the Agent, and the Lender hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed.
(c) Limited Duties. Under the Credit Documents, the Agent (i) is acting solely on behalf of the Secured Parties with respect to the Register, with duties that are entirely administrative in nature, notwithstanding the use of the defined terms “Administrative Agent,” “Collateral Agent,” “Agent,” the terms “agent” and “collateral agent” and similar terms in any Credit Document to refer to the Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any Credit Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for the Lender or other Person and (iii) will have no implied functions, responsibilities, duties, obligations or other liabilities under any Credit Document, and each Secured Party, by accepting the benefits of the Credit Documents, hereby waives and agrees not to assert any claim against the Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii) above. Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement with reference to the Administrative Agent or the Collateral Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.
49
8.2 Binding Effect. Each Secured Party, by accepting the benefits of the Credit Documents, agrees that (a) any action taken by the Agent or the Lender in accordance with the provisions of the Credit Documents, (b) any action taken by any Agent in reliance upon the instructions of the Lender and (c) the exercise by the Agent or the Lender of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, will be authorized and binding upon all of the Secured Parties.
8.3 Use of Discretion.
(a) No Action without Instructions. The Agent will not be required to exercise any discretion or take, or to omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (i) under any Credit Document or (ii) pursuant to instructions from the Lender. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for the Borrower), accountants, experts and other professional advisors selected by it. The Lender shall not have any right of action whatsoever against the Agent as a result of the Agent acting or (where so instructed) refraining from acting hereunder or any of the other Credit Documents in accordance with the instructions of the Lender.
(b) Right Not to Follow Certain Instructions. Notwithstanding clause (a) above, the Agent will not be required to take, or to omit to take, any action in connection herewith or any of the other Credit Documents or from the exercise of any power, discretion or authority vested in it hereunder or thereunder (i) unless, upon demand, the Agent receives an indemnification satisfactory to it from the Lender (or, to the extent applicable and acceptable to the Agent, any other Person) against all Liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against the Agent or any Related Person thereof or (ii) that is, in the opinion of the Agent or its counsel, may expose the Agent to liability or that is contrary to any Credit Document or applicable Law, and the Agent will not have any duty to disclose or will be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Agent or any of its Affiliates in any capacity.
(c) Exclusive Right to Enforce Rights and Remedies. Notwithstanding anything to the contrary contained herein or in any other Credit Document, the authority to enforce rights and remedies hereunder and under the other Credit Documents against the Borrower will be vested exclusively in, and all actions and proceedings in equity or at law in connection with such enforcement will be instituted and maintained exclusively by, the Agent in accordance with the Credit Documents for the benefit of the Lender; provided that the foregoing will not prohibit (i) the Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as the Agent) hereunder and under the other Credit Documents, (ii) the Lender from exercising setoff rights in accordance with Section 9.4 or (iii) the Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any bankruptcy or other Debtor Relief Law.
50
8.4 Delegation of Rights and Duties. The Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Credit Document by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any Secured Party).
8.5 Reliance and Liability.
(a) The Agents may, without incurring any liability hereunder, (i) treat the payee of any Term Loan as its holder until such Term Loan has been assigned in accordance with Section 9.6, (ii) rely on the Register to the extent set forth in Section 9.6, (iii) consult with any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, the Borrower) and (iv) rely and act upon any document and information (including those transmitted by Electronic Transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.
(b) None of the Administrative Agent in its capacity as such, the Collateral Agent in its capacity as such, or their respective Related Persons in such capacities will be liable for any action taken or omitted to be taken by any of them under or in connection with any Credit Document, and each Secured Party, the Borrower hereby waives and will not assert any right, claim or cause of action based thereon, except to the extent of liabilities resulting from the gross negligence or willful misconduct of the Agent or its Related Persons, or as the case may be, such Related Person or any of its Related Persons (in the case of any such Related Persons) (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly set forth herein; provided that no action taken or not taken by the Agent at the direction of the Lender, or as the Agent shall believe in good faith shall be necessary, under the circumstances as provided) shall constitute gross negligence or willful misconduct. Without limiting the foregoing, no Agent:
(i) will be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Lender or for the actions or omissions of any of its Related Persons selected with reasonable care (other than employees, officers and directors of the Agent, when acting on behalf of the Agent);
(ii) will be responsible to the Lender or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Credit Document;
51
(iii) makes any warranty or representation, or will be responsible, to the Lender or other Person for (A) any statement, document, information, including any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by any Agent to the Lender or by or on behalf of the Borrower to the Agent or the Lender in connection with the Credit Documents and the transactions contemplated thereby or for the financial condition or business affairs of the Borrower or any other Person liable for the payment of any Obligations, (B) any representation or warranty made or furnished by or on behalf of the Borrower or any Related Person of the Borrower in connection herewith or with any Credit Document or any transaction contemplated herein or therein or any other document, certificate or information with respect to the Borrower, whether or not transmitted or (except for documents expressly required under any Credit Document to be transmitted to the Lender) omitted to be transmitted by the Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by the Agent in connection with the Credit Documents, (C) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Credit Document or the occurrence of any Default, (D) the execution, effectiveness, genuineness, validity, enforceability, collectability, sufficiency or genuineness hereof or of any Credit Document or any other agreement, instrument or document or (E) the satisfaction of any condition set forth in Section 3 or elsewhere in any Credit Document; provided that for each of the items set forth in clauses (A) through (E) hereof, the Lender hereby waives and agrees not to assert any right, claim or cause of action it might have against any Agent based thereon; and
(iv) will have any duty to ascertain or to inquire as to the performance or observance of any provision of any Credit Document, whether any condition set forth in any Credit Document is satisfied or waived, as to the financial condition of the Borrower or as to the occurrence or continuation or possible occurrence or continuation of any Default or Event of Default or will be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice from the Borrower or the Lender describing such Default or Event of Default clearly labeled “notice of default” (in which case the Agent will promptly give notice of such receipt to the Lender).
(c) Erroneous Payments.
(i) The Lender hereby agrees that (A) if the Administrative Agent notifies the Lender or any Person who has received funds on behalf of the Lender (the Lender or other Person, a “Payment Recipient”) that the Administrative Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (ii)) that any funds received by such Payment Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to the Lender or Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”), and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Administrative Agent, and the Lender shall (or with respect to any Payment Recipient who received such funds on its behalf, shall cause the Payment Recipient to) promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (B) to the extent permitted by applicable Law, the Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on “discharge for value” or any similar doctrine. A notice of the Administrative Agent to the Lender under this Section 8.5(c) shall be conclusive, absent manifest error.
52
(ii) Without limiting clause (i) above, the Lender hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Administrative Agent or any of its Affiliates (A) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment (a “Payment Notice”), (B) that was not preceded or accompanied by a Payment Notice or (C) that the Lender or other Payment Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), in each case:.
(1) (x) in the case of immediately preceding clauses (A) or (B), an error shall be presumed to have been made (absent written confirmation from the Administrative Agent to the contrary) or (y) an error has been made (in the case of immediately preceding clause (c)), in each case, with respect to such payment, prepayment or repayment; and
(2) the Lender shall (and shall cause any other Payment Recipient that receives funds on its respective behalf to) promptly (and, in all events, within one Business Day of its knowledge of such error) notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent pursuant to this Section 8.5(c).
(iii) The Lender hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to the Lender under any Credit Document, or otherwise payable or distributable by the Administrative Agent to the Lender from any source, against any amount due to the Administrative Agent under immediately preceding clause (i) or under the indemnification provisions of this Agreement.
53
(iv) Each party hereto agrees that, irrespective of whether the Administrative Agent may be equitably subrogated, in the event that an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Payment Recipient under the Credit Documents with respect to such amount (the “Erroneous Payment Subrogation Rights”).
(v) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower, except to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds actually received by the Administrative Agent from or on behalf of (including through the exercise of any remedies under any of the Credit Documents) the Borrower.
(vi) Each party’s obligations, agreements and waivers under this Section 8.5(c) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, the Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Credit Document.
(vii) Notwithstanding anything to the contrary herein, none of the Borrower or any of its Affiliates shall have any obligations or liabilities directly or indirectly arising out of this Section 8.5, and the Administrative Agent expressly agrees, on behalf of itself and its Affiliates, that Section 9.3 shall not apply to any Erroneous Payment. Subject to clause (v) above, in no event shall the making of any Erroneous Payment, or any fees, costs and expenses of the Administrative Agent or any of its Affiliates incurred in connection with any recovery or attempted recovery thereof, increase the Obligations of the Borrower hereunder.
(d) Each party to this Agreement acknowledges and agrees that the Administrative Agent may from time to time use one or more outside service providers for the tracking of all Uniform Commercial Code financing statements (and/or other collateral related filings and registrations from time to time) required to be filed or recorded pursuant to the Credit Documents and the notification to the Administrative Agent, of, among other things, the upcoming lapse or expiration thereof. The Agent will not be liable for any action taken or not taken by any such service provider.
(e) Each party’s obligations under this Section 8.5 shall survive the resignation or replacement of the Agent, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Credit Document.
54
8.6 Agents and Lead Arranger Individually. The Agent and its Affiliates may make loans and other extensions of credit to, acquire Equity Interests of, engage in any kind of business, including but not limited to any type of financial advisory business, with the Borrower or Affiliate thereof as though it were not acting as the Agent and may receive separate fees and other payments therefor. To the extent the Agent or any of their respective Affiliates makes any Term Loan or otherwise becomes a Lender hereunder, it will have and may exercise the same rights and powers hereunder and will be subject to the same obligations and liabilities as the Lender.
8.7 Expenses; Indemnities; Withholding.
(a) The Lender agrees to reimburse each Agent and each of their respective Related Persons (to the extent not reimbursed by the Borrower) promptly upon demand for any costs and expenses (including fees, charges and disbursements of financial, legal and other advisors) that may be incurred by the Agent or any of its Related Persons in connection with the preparation, syndication, execution, delivery, administration, modification, consent, waiver or enforcement of, or the taking of any other action (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding (including preparation for and/or response to any subpoena or request for document production relating thereto) or otherwise) in respect of, or legal advice with respect to, its rights or responsibilities under, any Credit Document. The provisions of this Section 8.7(a) shall survive the resignation or replacement of the Agent, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Credit Document.
(b) The Lender further agrees to indemnify the Agent and each of their respective Related Persons (to the extent not reimbursed by the Borrower), severally and ratably, in proportion to its Pro Rata Share, from and against Liabilities (including, to the extent not indemnified pursuant to Section 8.7(c), Taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to or for the account of the Lender) that may be imposed on, incurred by or asserted against the Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any Credit Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by the Agent or any of its Related Persons under or with respect to any of the foregoing, including, but not limited to, the payment of principal, interest and fees (IN ALL CASES, WHETHER OR NOT CAUSED OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE AGENT OR RELATED PERSON); provided, however, that no Lender will be liable to any Agent or any of their respective Related Persons to the extent such liability has resulted solely and directly for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, claims, suits, judgments, litigations, investigations, inquiries or proceedings, costs, expenses or disbursements which have resulted from the gross negligence or willful misconduct of such Person, as determined by a court of competent jurisdiction in a final non-appealable judgment or order. The provisions of this Section 8.7(b) shall survive the resignation or replacement of the Agent, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Credit Document.
55
(c) If the Internal Revenue Service or any other Governmental Authority asserts a claim that the Agent did not properly withhold Tax from amounts paid to or for the account of the Lender (because the appropriate certification form was not delivered, was not properly executed, or fails to establish an exemption from, or reduction of, withholding Tax with respect to a particular type of payment, or because the Lender failed to notify the Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding Tax ineffective, or for any other reason), or the Agent reasonably determines that it was required to withhold Taxes from a prior payment but failed to do so, the Lender will promptly indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as Tax or otherwise, including penalties and interest, and together with all expenses incurred by the Agent, including legal expenses, allocated internal costs and out-of-pocket expenses. Each of the Administrative Agent and the Collateral Agent may offset against any payment to the Lender under a Credit Document, any applicable withholding Tax that was required to be withheld from any prior payment to the Lender but which was not so withheld, as well as any other amounts for which the Agent is entitled to indemnification from the Lender under this Section 8.7(c). The provisions of this Section 8.7(c) shall survive the resignation or replacement of the Agent, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Credit Document.
8.8 Resignation or Removal of Agent.
(a) The Agent may resign at any time by delivering notice at least thirty (30) days in advance of such resignation to the Lender and the Borrower, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date such notice will be effective, in accordance with the terms of this Section 8.8(a). If the Agent delivers any such notice, the Lender will have the right, subject to the consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed), at all times other than during the continuation of an Event of Default under Section 7.1(a), 7.1(e) or 7.1(f), to appoint a successor Administrative Agent or Collateral Agent, as applicable. The Agent’s resignation shall become effective on the earlier of (x) the appointment of a successor Agent by the Lender and (y) the date that is thirty (30) days after the date of such retiring Agent’s notice of resignation. If, after thirty (30) days after the date of such retiring Agent’s notice of resignation, no successor Agent has been appointed by the Lender that has accepted such appointment, then such retiring Agent may, (i) on behalf of the Lender, appoint a successor Agent from among any financial institution organized, incorporated, formed and/or registered (as applicable) under the laws of the United States (or any State thereof) or a United States branch or agency of a financial institution, and (ii) the Lender shall hold any collateral previously held by the Collateral Agent as a gratuitous bailee until a successor Collateral Agent has been appointed. Each appointment under this clause (a) will be subject to the prior consent of the Borrower, which will not be unreasonably withheld, conditioned or delayed but will not be required during the continuation of an Event of Default under Section 7.1(a), 7.1(e) or 7.1(f).
(b) The Lender will have the right, at any time and from time to time, to remove the Administrative Agent and/or the Collateral Agent, in each case with or without cause, and, subject to the consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed) at all times other than during the continuation of an Event of Default under Section 7.1(a), 7.1(e) or 7.1(f), to appoint a successor Administrative Agent or Collateral Agent, as applicable. The removal of an Agent shall become effective on the appointment of a successor Agent by the Lender.
56
(c) Effective immediately upon its resignation or removal, (i) any retiring or removed Agent will be discharged from its duties and obligations under the Credit Documents, other than duties and obligations arising under Section 9.17, (ii) the Lender will assume and perform all of the duties of the Agent until a successor Agent will have accepted a valid appointment hereunder, (iii) such retiring or removed Agent and its Related Persons will no longer have the benefit of any provision of any Credit Document as Administrative Agent or Collateral Agent, as applicable, other than with respect to any actions taken or omitted to be taken while such retiring or removed Agent was, or because the Agent had been, validly acting as Administrative Agent or Collateral Agent, as applicable, under the Credit Documents and (iv) subject to its rights under Section 8.3, such retiring or removed Agent will take such action as may be reasonably necessary to assign to the applicable successor Agent its rights as Administrative Agent or Collateral Agent, as applicable, under the Credit Documents, provided that the retiring Agent shall have no obligation to take any such action unless and until it has received all outstanding fees, costs, expenses and indemnification amounts owed to it under this Agreement and the other Credit Documents. After any retiring or removed Agent’s resignation hereunder as an Agent, the provisions of this Section 8 and Sections 2.14(k), 9.2, 9.3, 9.4, 9.10, 9.14, 9.15 and 9.16 will inure to its benefit, its sub-agents and their respective affiliates benefit as to any actions taken or omitted to be taken by any of them while it was Administrative Agent or Collateral Agent hereunder. Effective immediately upon the acceptance of a valid appointment as Administrative Agent or Collateral Agent by a successor Administrative Agent or Collateral Agent, as the case may be, such successor Administrative Agent or Collateral Agent will succeed to, and become vested with, all the rights, powers, privileges and duties of such retiring or removed Agent under the Credit Documents and the retiring or removed Agent will promptly (A) transfer to its successor all sums, Securities and other items of Collateral held under the Collateral Documents, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Agent under the Credit Documents, and (B) execute and deliver to such successor Agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Agent of the security interests created under the Collateral Documents.
8.9 Release of Collateral.
(a) The Lender hereby consents to the release and hereby directs the Administrative Agent and the Collateral Agent to (i) release (and/or agree to the automatic release of, as applicable) any Lien held by the Collateral Agent for the benefit of the Secured Parties against (A) any Collateral (or portion thereof) that is sold, transferred, conveyed or otherwise disposed of by the Borrower in a transaction permitted by the Credit Documents and (B) all of the Collateral and the Borrower, upon satisfaction of the Termination Conditions and (ii) give instructions to the Account Bank with respect to any Collateral Account to effectuate any permitted release of amounts therefrom as permitted by the Credit Documents (and the Administrative Agent or Collateral Agent, as applicable, agrees to give such instructions). Upon any such release, at the request and sole expense of the applicable Borrower, the Administrative Agent or Collateral Agent, as applicable, shall promptly deliver to the Borrower (or any other Person designated by the Borrower, including without limitation the purchaser or other transferee thereof) any Collateral (or portion thereof) and other applicable instruments being so released and held by the Agent hereunder (including any share certificates and stock or transfer powers with respect thereto), and shall execute and deliver to the Borrower or any other applicable Person such documents as the Borrower shall reasonably request to evidence such release.
57
(b) The Lender hereby directs the Administrative Agent and the Collateral Agent, and each of the Administrative Agent and the Collateral Agent hereby agrees, at the request of the Borrower, to execute and deliver or file such documents and to perform other actions reasonably necessary to release the guaranties and Liens when and as directed in this Section 8.9(a), subject, solely in the case of any release contemplated by clause (i) of Section 8.9(a), to receipt by the Administrative Agent of a certification of the Borrower confirming that the applicable sale, transfer, conveyance or other disposal is permitted by the Credit Documents. To the extent any Collateral is disposed of as permitted by the Credit Documents to any Person other than the Borrower, such Collateral will be sold or disposed of free and clear of Liens created by the Credit Documents and the Administrative Agent will be authorized to take any actions deemed appropriate in order to effect the foregoing.
(c) In the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale or other disposition, the Collateral Agent (at the direction of the Lender) or the Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition and the Collateral Agent, as agent for and representative of Secured Parties, at the direction of the Lender, will be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by the Collateral Agent at such sale or other disposition (including pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code), the Collateral Agent (or the Lender, except with respect to a “credit bid” pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code). Any release of guarantee obligations will be deemed subject to the provision that such guarantee obligations will be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby will be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, striking-off, liquidation or reorganization of the Borrower or Parent, or upon or as a result of the appointment of a receiver, monitor, intervenor, or conservator of, or trustee or similar officer for, the Borrower or any substantial part of its property, or otherwise, all as though such payment had not been made. The Collateral Agent will not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by the Borrower in connection therewith, nor will the Collateral Agent be responsible or liable to the Lender for any failure to monitor or maintain any portion of the Collateral.
8.10 Administrative Agent May File Bankruptcy Disclosure and Proofs of Claim. In the case of pendency of any proceeding under any Bankruptcy Proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Term Loan will then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent will have made any demand on the Borrower), acting on the instructions of the Lender, will be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
58
(a) to file a verified statement pursuant to the Federal Rules of Bankruptcy Procedure that, in its sole opinion, complies with such rule’s disclosure requirements for entities representing more than one creditor;
(b) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Term Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lender and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its respective agents and counsel and all other amounts due the Administrative Agent under Section 2, Section 9.2 and Section 9.3) allowed in such judicial proceeding; and
(c) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, monitor, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by the Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent will consent to the making of such payments directly to the Lender, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under this Agreement. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Administrative Agent, its agents and counsel, and any other amounts due the Administrative Agent under this Agreement out of the estate in any such proceeding, will be denied for any reason, payment of the same will be secured by a Lien on, and will be paid out of, any and all distributions, dividends, money, securities and other properties that the Lender may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing contained herein will be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of the Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of the Lender or to authorize the Administrative Agent to vote in respect of the claim of the Lender in any such proceeding.
8.11 Certain ERISA Matters
(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true:
(i) such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Term Loans, the Commitments or this Agreement,
59
(ii) transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 9623 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Term Loans, the Commitments and this Agreement,
(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Term Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Term Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (f) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Term Loans, the Commitments and this Agreement; or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
(b) In addition, unless either (i) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (ii) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in the Term Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any other Credit Document or any documents related hereto or thereto).
(c) For purposes of this Section 8.11, “Benefit Plan” means any of (i) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (ii) a “plan” as defined in, and subject to Section 4975 of the Code or (iii) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan” and “PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.]
60
Section 9. MISCELLANEOUS
9.1 Notices.
(a) Addresses. All notices and other communications required or expressly authorized to be made by this Agreement will be given in writing, unless otherwise expressly specified herein, and (i) addressed to the address set forth on Appendix B or otherwise indicated to the Borrower and the Administrative Agent in writing, (ii) in the case of notices and other communications to the Administrative Agent or the Lender, posted to the Platform (to the extent such system is available and set up by or at the direction of the Administrative Agent prior to posting), (iii) in the case of notices and other communications to the Administrative Agent or the Lender, posted to any other E-System approved by or set up by or at the direction of the Administrative Agent or (iv) addressed to such other address as will be notified in writing (A) in the case of the Borrower or the Agent, to the other parties hereto and (B) in the case of all other parties, to the Borrower or the Agent. Transmissions made by electronic mail to the Administrative Agent will be effective only if such transmission is delivered in compliance with procedures of the Administrative Agent applicable at the time and previously communicated to the Borrower.
(b) Effectiveness. All communications described in clause (a) above and all other notices, demands, requests and other communications made in connection with this Agreement will be effective and be deemed to have been received (i) if delivered by hand, upon personal delivery, (ii) if delivered by overnight courier service, upon confirmation of delivery by such courier service or upon refusal by the addressee to accept delivery, (iii) if delivered by registered mail, upon confirmation of delivery or upon refusal by the addressee to accept delivery, and (iv) except as otherwise provided in any procedures of the Administrative Agent and the Lender applicable at the time and previously communicated to the Borrower, if delivered by electronic mail, when receipt is confirmed by return reply; provided, however, that no communications to the Lender or the Administrative Agent pursuant to Section 2.1, Section 2.2 or Section 2.9 will be effective until received by the Administrative Agent.
(c) The Lender will notify the Agent in writing of any changes in the address to which notices to the Lender should be directed, of addresses of its Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent will reasonably request.
(d) Electronic Transmissions.
(i) Authorization. Subject to the provisions of Section 9.1(a), the Agent, the Lender, the Borrower and each of their Related Persons, is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Credit Document and the transactions contemplated therein. The Borrower and each Secured Party hereto acknowledges and agrees that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions.
61
(ii) Signatures. Subject to the provisions of Section 9.1(a), to the extent permitted by Law, (i)(A) no posting to any E-System will be denied legal effect merely because it is made electronically, (B) each E Signature on any such posting will be deemed sufficient to satisfy any requirement for a “signature” and (C) each such posting will be deemed sufficient to satisfy any requirement for a “writing,” in each case including pursuant to any Credit Document, any applicable provision of any applicable UCC, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Law governing such subject matter, (ii) each such posting that is not readily capable of bearing either a signature or a reproduction of a signature may be signed, and will be deemed signed, by attaching to, or logically associating with such posting, an E-Signature, upon which the Agent, each other Secured Party and the Borrower may rely and assume the authenticity thereof, (iii) each such posting containing a signature, a reproduction of a signature or an E-Signature will, for all intents and purposes, have the same effect and weight as a signed paper original and (iv) each party hereto or beneficiary hereto agrees not to contest the validity or enforceability of any posting on any E-System or E-Signature on any such posting under the provisions of any applicable Law requiring certain documents to be in writing or signed; provided, however, that nothing herein will limit such party’s or beneficiary’s right to contest whether any posting to any E-System or E-Signature has been altered after transmission.
(iii) Separate Agreements. All uses of an E-System will be governed by and subject to, in addition to Section 9.1, the separate terms, conditions and privacy policy posted or referenced in such E-System (or such terms, conditions and privacy policy as may be updated from time to time, including on such E-System) and related contractual obligations executed by the Administrative Agent and the Borrower in connection with the use of such E-System.
(iv) LIMITATION OF LIABILITY. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS WILL BE PROVIDED “AS IS” AND “AS AVAILABLE.” NONE OF THE AGENT, THE LENDER, THE BORROWER OR ANY OF THEIR RELATED PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION AND DISCLAIMS ALL LIABILITY (WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN CONTRACT, TORT OR OTHERWISE)) FOR ERRORS OR OMISSIONS THEREIN. NO WARRANTY OF ANY KIND IS MADE BY THE AGENT, THE LENDER, THE BORROWER OR ANY OF THEIR RELATED PERSONS IN CONNECTION WITH ANY E SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS. The Borrower and each Secured Party agrees that the Administrative Agent has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System.
62
(e) The Borrower agrees that the Administrative Agent may make the communications to other Agents or the Lender described in clause (a) above available to such other Agents or the Lender by posting such communications on any Platform.
9.2 Expenses. The Borrower agrees to pay promptly, and in any event on or before the Closing Date to the extent invoiced at least one (1) Business Day prior to the Closing Date, (a) all reasonable and documented out-of-pocket costs, fees and expenses (including reasonable legal fees and expenses) of the Agents and the Lender incurred in connection with the negotiation, execution, delivery and enforcement of the Credit Documents and any consents, amendments, waivers or other modifications thereto; (b) all the reasonable and documented out-of-pocket fees and expenses (including reasonable legal fees and expenses) of creating, perfecting, recording and maintaining Liens in favor of the Collateral Agent, for the benefit of the Secured Parties, including filing and recording fees, expenses, lien search fees and actual, reasonable documented out-of-pocket fees, expenses and disbursements of counsel to the Agent and the Lender; (c) all reasonable and documented out-of-pocket costs, fees and expenses (including reasonable legal fees and expenses) of the Agent and the Lender incurred in connection with the rating of the Term Loans and on-going rating surveillance and (d) after the occurrence and during the continuance of an Event of Default, all reasonable and documented out-of-pocket fees and expenses, including actual, reasonable and documented out-of-pocket attorneys’ fees and costs of settlement, incurred by the Agent and the Lender in enforcing any Obligations of or in collecting any payments due from the Borrower hereunder or under the other Credit Documents by reason of such Event of Default (including in connection with the sale of, collection from, or other realization upon any of the Collateral) or preservation of any right or remedy under any Credit Document or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings. For the avoidance of doubt, (i) no payment or expense reimbursement shall be made pursuant to this Section 9.2 in respect of Excluded Taxes and (ii) it shall be the responsibility of the Borrower hereunder to pay ongoing costs, fees and expenses in connection with the rating of the Term Loans and on-going rating surveillance.
63
9.3 Indemnity; Certain Waivers.
(a) Indemnity. In addition to the payment of expenses pursuant to Section 9.2, the Borrower agrees to indemnify, pay and hold harmless, the Agent, and each Related Person of the Agent (each such Person an “Agent Indemnitee”), the Lender and each Related Person of the Lender (each such Person a “Lender Indemnitee”; together with the Agent Indemnitee, each such Person being called an “Indemnitee”) from and against any and all Indemnified Liabilities; provided that the Borrower will not have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities (i) arise from the gross negligence or willful misconduct of that Indemnitee or its Related Persons as determined by a court of competent jurisdiction in a final non-appealable order or (ii) relate to any dispute solely among Indemnitees other than (A) claims against an Agent, in its capacity as such or in fulfilling its role as an Agent, and (B) claims arising out of any act or omission on the part of the Borrower or its Subsidiaries or Affiliates; provided further that (x) with respect to Agent Indemnitees, such indemnity shall apply whether or not any Agent Indemnitee is a party to such investigation, litigation or other proceeding, and (y) the Borrower shall be responsible hereunder for the actual, reasonable and documented out-of-pocket fees and expenses of only one counsel for (w) the Agent Indemnitees, taken as a whole, (x) the Lender Indemnitees, taken as a whole, (y) if reasonably necessary or advisable in the judgment of the Agents, a single local or foreign counsel to the Indemnitees taken as a whole in each relevant jurisdiction and (z) solely in the case of an actual or perceived conflict of interest, one additional primary counsel, one additional local or foreign counsel in each applicable jurisdiction, in each case, to each similarly situated group of affected Indemnitees. To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this Section 9.3 may be unenforceable in whole or in part because they are violative of any law or public policy, the Borrower will contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them. Solely with respect to the Lender Indemnitees, the Borrower agrees that, without the prior written consent of the respective Lender Indemnitees, which consent will not be unreasonably withheld or delayed, the Borrower will not enter into any settlement of a claim in respect of which indemnification could have been sought by an Indemnitee under this Section 9.3(a) unless such settlement includes an explicit and unconditional release from the party bringing such claim of all Indemnitees which could have sought indemnification with respect to such claim under this Section 9.3(a). The Agent agrees to notify the Borrower in writing prior to the Agent Indemnitee entering into any settlement. This Section 9.3 will not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(b) To the extent that the Borrower fails to indefeasibly pay any amount required to be paid by them to the Agents and their Related Persons under Sections 9.3(a), the Lender agrees to pay to the applicable Agent any unpaid amount (such indemnity will be effective whether or not the related losses, claims, damages, liabilities and related expenses are incurred or asserted by any party hereto or any third party); provided that the unreimbursed claim was incurred by or asserted against any of the Agents in its capacity as such.
(c) No Indemnitee will be liable for any damages arising from the use by others of information or other materials obtained through electronic, telecommunications or other information transmission systems (including the Platform) and neither any Indemnitee nor the Borrower (or any of their respective directors, officers, employees, controlling Persons, controlled affiliates or agents) will be liable for any indirect, special, punitive or consequential damages in connection with the Transactions, this Agreement or any other Credit Document (including the Term Loans and the use of proceeds hereunder), or with respect to any activities or other transactions related to the Term Loans; provided that nothing contained in this sentence limits (i) the Borrower’s indemnity and reimbursement obligations to the extent such special, indirect, punitive or consequential damages are included in any third party claim in connection with which such Indemnitee is entitled to indemnification hereunder or (ii) any Indemnitee’s liability for damages arising as a result of such Indemnitee’s or its Related Person’s gross negligence or willful misconduct, as determined in the final and non-appealable judgment by a court of competent jurisdiction.
64
9.4 Set-Off. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence of any Event of Default, but subject to Section 2.12, the Lender is hereby authorized by the Borrower at any time or from time to time subject to the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed), without notice to the Borrower or to any other Person (other than the Administrative Agent), any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held or owing by the Lender to or for the credit or the account of the Borrower against and on account of the Obligations of the Borrower to the Lender hereunder and under the other Credit Documents, including all claims of any nature or description arising out of or connected hereto or with any other Credit Document, irrespective of whether or not (a) the Lender will have made any demand hereunder or (b) the principal of or the interest on the Term Loans or any other amounts due hereunder will have become due and payable pursuant to Section 2 and although such obligations and liabilities, or any of them, may be contingent or unmatured.
9.5 Amendments and Waivers.
(a) Required Consents. No amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by the Borrower therefrom, will in any event be effective without the written concurrence of the Lender and the Borrower; provided, however, that no such amendment, modification, termination, waiver or consent shall, without the written consent of the Agent, affect the rights, duties or obligations of the Agent under this Agreement or any other Credit Document or reduce or delay payment of any fees or other amounts payable to the Agent hereunder or thereunder. Notwithstanding the foregoing, (i) the Borrower and the Collateral Agent may enter into additional or supplemental Collateral Documents, (ii) the Collateral Agent may release Collateral in accordance with of this Agreement and the Collateral Documents, (iii) the Agent Fee Letter may be amended by the parties thereto without the consent of any other Person, (iv) if any provision hereof or of any other Credit Document expressly provides for any schedule hereto or thereto to be updated or amended at the option of any specified party, any such amendment or update will be effective without the consent of any other party to this Agreement or such other Credit Document and (v) no such agreement shall be effective as it pertains to the Agent until such time as the Agent has received a duly executed and fully compiled copy of any such agreement.
(b) Execution of Amendments, etc. Any amendment, modification, termination, waiver or consent effected in accordance with this Section 9.5 will be binding upon the Lender and, if signed by the Borrower, on the Borrower. Without limiting the generality of the foregoing, the making of a Term Loan will not be construed as a waiver of any Default, regardless of whether the Lender may have had notice or knowledge of such Default at the time.
9.6 Successors and Assigns; Participations.
(a) Generally. This Agreement will be binding upon the parties hereto and their respective successors and assigns and will inure to the benefit of the parties hereto and the successors and permitted assigns of the Lender. Neither the Borrower’s rights or obligations hereunder nor any interest therein may be assigned or delegated by the Borrower without the prior written consent of all of the Lender and the Agent. Nothing in this Agreement, expressed or implied, will be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Persons of the Agent and the Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.
65
(b) Register. The Borrower, the Agent and the Lender will deem and treat the Persons listed as the Lender in the Register as the holders and owners of the corresponding Commitments and Term Loans listed therein for all purposes hereof, and no assignment or transfer of any such Commitment or Term Loan (whether or not evidenced by a Term Note) will be effective, in each case, unless and until recorded in the Register following receipt by the Administrative Agent of an Assignment Agreement effecting the assignment or transfer thereof, together with the required forms and certificates regarding tax matters, all “know-your-customer” documentation reasonably requested by Administrative Agent and any fees payable in connection with such assignment, in each case, as provided in Section 9.6(d). Each assignment will be recorded in the Register by the Administrative Agent, prompt notice thereof will be provided to the Borrower and a copy of such Assignment Agreement will be maintained. The date of such recordation of a transfer will be referred to herein as the “Assignment Effective Date.” Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender will be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Term Loans.
(c) Right to Assign. Notwithstanding anything in this Agreement or the other Credit Documents to the contrary (including without limitation Section 9.6(a) hereof), Lender hereby covenants and agrees that it will not transfer, assign or otherwise convey or participate to any other entity or person any direct or indirect interest in the Loan other than (i) the assignment to a Lender Affiliate. pursuant to an assignment agreement equivalent to the Assignment Agreement, of all (and not part) of the Loan and the Lender’s rights under this Term Loan Agreement and the other Credit Documents and (ii) the participation to a Lender Affiliate of 100% of Lender’s interest in the Loan and the other Credit Documents. Notwithstanding anything herein to the contrary, the Administrative Agent shall have no duty, responsibility or liability to monitor, verify, confirm, investigate or otherwise determine whether any proposed assignee qualifies as a Lender Affiliate, and the Lender shall be solely responsible for any such determination; and none of the Administrative Agent or any of its Related Persons shall be responsible or liable for any loss, cost, expense, damage, claim or liability arising out of or relating to any assignment or participation to a Person that is not a Lender Affiliate.
Notwithstanding the foregoing, no assignment may be made to (a) a Natural Person, (b) any Affiliate of the Borrower or any Person controlled by any of them or (c) any Non-U.S. Lender.
(d) Mechanics. Assignments and assumptions of Term Loans and Commitments will only be effected by manual execution and delivery to the Administrative Agent of an Assignment Agreement and will be effective as of the applicable Assignment Effective Date. In connection with all assignments, payment of a registration and processing fee of $3,500 will be delivered to the Administrative Agent; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.
66
(e) Representations and Warranties of Assignee. The Lender, upon execution and delivery hereof or upon succeeding to an interest in the Commitments and Term Loans, as the case may be, represents and warrants as of the Closing Date or as of the Assignment Effective Date that it has experience and expertise in the making of or investing in commitments or loans such as the Commitments or Term Loans, as the case may be.
(f) Effect of Assignment. Subject to the terms and conditions of this Section 9.6, as of the Assignment Effective Date (i) the assignee thereunder will have the rights and obligations of a “Lender” hereunder to the extent of its interest in the Term Loans and Commitments as reflected in the Register and will thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder will, to the extent that rights and obligations hereunder have been assigned to the assignee, relinquish its rights (other than any rights which survive the termination hereof under Section 9.8) and be released from its obligations hereunder (and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s rights and obligations hereunder, the Lender will cease to be a party hereto on the Assignment Effective Date; provided that anything contained in any of the Credit Documents to the contrary notwithstanding, such assigning Lender will continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising out of the prior involvement of such assigning Lender as a Lender hereunder); (iii) the Commitments will be modified to reflect the Commitment of such assignee and any Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Term Note hereunder, the assigning Lender will, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender the Term Note to the Borrower for cancellation, and thereupon the Borrower will issue and deliver a new Term Note, if so requested by the assignee and/or assigning Lender, to such assignee and/or to such assigning Lender, with appropriate insertions.
(g) Participations. Subject to Section 9.6(c), the Lender will have the right at any time to sell one or more participations to any Person in all or any part of its Commitments, Term Loans or in any other Obligation; provided that (i) the Lender’s obligations under this Agreement shall remain unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Agent shall continue to deal solely and directly with the Lender in connection with the Lender’s rights and obligations under this Agreement. The holder of any such participation will not be entitled to require the Lender to take or omit to take any action hereunder except with respect to any amendment, modification or waiver that would (i) extend the scheduled maturity of any Term Loan or Term Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Commitments will not constitute a change in the terms of such participation, and that an increase in any Commitment or Term Loan will be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (ii) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (iii) release all or substantially all of the Collateral under the Collateral Documents (except as expressly provided in the Credit Documents) supporting the Term Loans hereunder. The Borrower agrees that each participant will be entitled to the benefits of Sections 2.13 and 2.14 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (c) of this Section to the extent such participant complies with the requirements of such Sections; The Lender that sells a participation, acting for itself and solely for this purpose as a non-fiduciary agent of the Borrower, will maintain a register on which it records the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Term Loans and Commitments (each, a “Participant Register”). The entries in the Participant Register will be conclusive absent manifest error, and the Lender, the Borrower and the Administrative Agent will treat each Person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of a participation in such Term Loans and Commitments for all purposes of this Agreement, notwithstanding any notice to the contrary. The Lender will not have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations under any Credit Document) except to the extent that such disclosure is necessary to establish that such commitment, loan, or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations and Proposed Treasury Regulations Section 1.163-5(b) (or any amended or successor version). For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.
67
(h) Certain Other Assignments and Participations. In addition to any other assignment or participation permitted pursuant to this Section 9.6, but subject to Section 9.6(c), the Lender may pledge all or any portion of its Term Loans, the other Obligations owed to the Lender, and the Term Note, to secure obligations of the Lender; provided that (i) the Lender, as between the Borrower, on the one hand, and the Lender, on the other hand, will not be relieved of any of its obligations hereunder as a result of any such assignment and pledge; (ii), in no event will the applicable pledgee or trustee be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder, and (iii) no pledgee may enforce any interest in any Term Loans upon enforcement of any such pledge (whether such enforcement is by foreclosure, assignment or otherwise) unless the pledgee or proposed assignee would be a permitted assignee under other provisions of this Section 9.6.
(i) Electronic Signatures, Etc. The words “execution,” “signed,” “signature,” and words of like import in any Assignment Agreement will be deemed to include electronic signatures or the keeping of records in electronic form, each of which will be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
9.7 Independence of Covenants; Interpretation. All covenants hereunder will be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant will not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists. Any dispute regarding the occurrence or continuance of a Default or Event of Default will be resolved by the Borrower and the Lender (or Administrative Agent), and no Person other than the Lender (or the Administrative Agent) will assert that a Default or Event of Default will have occurred and be continuing. Any Default or Event of Default that has been cured (including by means of delivery or performance of an obligation after the date by which such delivery or performance was due) or waived will be deemed to no longer be continuing.
68
9.8 Survival of Representations, Warranties and Agreements. All representations, warranties and agreements made herein will survive the execution and delivery hereof and the making of any Term Loan. Notwithstanding anything herein or implied by law to the contrary, the agreements of the Borrower set forth in Sections 2.13, 2.14, 9.2, 9.3, 9.14, 9.15 and 9.16 and the agreements of the Agents and the Lender set forth in Section 9.17 will survive the termination of all Commitments, the termination hereof, and the payment in full of all Obligations; provided that the agreements of the Agents and the Lender set forth in Section 9.17 will expire on the second anniversary of the termination hereof and the payment in full of the Obligations.
9.9 No Waiver; Remedies Cumulative. No failure or delay on the part of the Agent or the Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document will impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor will any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to the Agent and the Lender hereby are cumulative and will be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder will not impair any such right, power or remedy or be construed to be a waiver thereof, nor will it preclude the further exercise of any such right, power or remedy.
9.10 Marshalling; Payments Set Aside. Neither the Agent nor the Lender will be under any obligation to marshal any assets in favor of the Borrower or any other Person or against or in payment of any or all of the Obligations. To the extent that the Borrower makes a payment or payments to the Agent or the Lender (or to the Agent, on behalf of the Lender), or the Agent or the Lender enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, will be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.
9.11 Severability. In case any provision in or obligation hereunder or any Term Note will be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or, to the extent permitted by Law, of such provision or obligation in any other jurisdiction, will not in any way be affected or impaired thereby.
9.12 Obligations of the Lender.
(a) The obligations of the Lender hereunder are independent contractual obligations of the Lender and shall be enforceable by the Borrower and the Lender in accordance with the terms of this Agreement and the other Credit Documents.
69
9.13 Headings. Section headings herein are included herein for convenience of reference only and will not constitute a part hereof for any other purpose or be given any substantive effect.
9.14 Applicable Law. This Agreement and the rights and obligations of the parties hereunder will be governed by, and will be construed and enforced in accordance with, the laws of the State of New York without regard to any conflicts of law principles or rules to the extent such principles or rules are not mandatorily applicable by statute and would require or permit the application of the laws of another jurisdiction.
9.15 Consent to Service of Process and Jurisdiction. All judicial proceedings brought against any party hereto arising out of or relating hereto or any other Credit Document, or any of the Obligations, may be brought in any state or Federal court of competent jurisdiction in the State, County and City of New York. By executing and delivering this Agreement, each party hereto, for itself and in connection with its properties, irrevocably (a) accepts generally and unconditionally the non-exclusive jurisdiction and venue of such courts; (b) waives any defense of forum non conveniens; (c) agrees that service of all process in any such proceeding in any such court may be in any manner permitted by law; (d) agrees that service as provided in clause (c) above is sufficient to confer personal jurisdiction over the applicable party in any such proceeding in any such court, and otherwise constitutes effective and binding service in every respect; and (e) agrees that the other parties hereto retain the right to serve process in any other manner permitted by law or to bring proceedings against any other party in the courts of any other jurisdiction. The foregoing shall not limit the right of the Lender or the Agent to serve process in any other manner permitted by law or to bring any suit, legal action or proceeding or to obtain execution of judgment in any other jurisdiction.
9.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF THE PARTIES HERETO WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
70
9.17 Confidentiality. The Agent and the Lender will (A) keep all Confidential Information confidential and not furnish it to any other Person and (B) treat all Confidential Information with the same degree of care as it treats its own confidential information, it being understood and agreed by the Borrower that, in any event, the Agent or the Lender may make (i) disclosures of such information to Affiliates of the Agent or the Lender, to their and such Affiliates’ shareholders, officers, directors, employees, legal counsel, independent auditors, valuation agents and other experts, advisors, service providers or agents who need to know such information in connection with the transactions contemplated hereby, are informed of the confidential nature of such information and are subject to confidentiality obligations or duties with respect thereto, (ii) disclosures required or requested by any Governmental Authority or self-regulatory authority or representative thereof or by the NAIC or pursuant to legal or judicial process; provided that, unless prohibited by applicable law, court order or any Governmental Authority or representative thereof, the Agent and the Lender will use reasonable efforts to notify the Borrower of any request by any Governmental Authority or self-regulatory authority or representative thereof (other than any such request in connection with any routine examination of the financial condition or other routine examination of the Agent or the Lender by such Governmental Authority or representative thereof or self-regulatory authority) for disclosure of any such Confidential Information prior to disclosure of such information, (iii) disclosures reasonably required in connection with the enforcement of its rights under any Credit Document, (iv) disclosures to any other party to this Agreement, (v) disclosures to an actual or prospective assignee, participant (provided that such assignee or participant is advised of and agrees to be bound by either the provisions of this Section 9.17 or other provisions at least as restrictive as this Section 9.17), (vi) disclosure to one or more rating agencies in connection with their rating of the Term Loans and (vii) disclosures with the consent of the Borrower.
9.18 Usury Savings Clause. Notwithstanding any other provision herein, the aggregate interest rate charged with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law will not exceed the Highest Lawful Rate. If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the Term Loans made hereunder will bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Term Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, the Borrower will pay to the Lender an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the stated rates of interest set forth in this Agreement had at all times been in effect. Notwithstanding the foregoing, it is the intention of the Lender and the Borrower to conform strictly to any applicable usury laws. Accordingly, if the Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess will be cancelled automatically and, if previously paid, will at the Lender’s option be applied to the outstanding amount of the Term Loans made hereunder or be refunded to the Borrower.
9.19 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, but all such counterparts together will constitute but one and the same instrument. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission will be as effective as delivery of a manually executed counterpart hereof. The words “execute”, “execution”, “sign”, “signed” and “signature” (and any words of like import) in this Agreement or, with the consent of the Lender (which may be granted by email), any other Credit Document or any other document relating hereto or thereto shall be deemed to include and permit electronic signatures, the electronic delivery of signatures and the keeping of records in electronic form, and any such electronic signature, delivery or record shall have the same legal effect, validity and enforceability as a manually executed signature or paper signature page, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state laws based on the Uniform Electronic Transactions Act.
71
9.20 No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.
9.21 Effectiveness; Entire Agreement. This Agreement will become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by the Borrower and the Lender of written notification of such execution and authorization of delivery thereof. This Agreement and the other Credit Documents constitute the entire agreement among the parties hereto and thereto and their affiliates regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters.
9.22 No Fiduciary Duty. The Agent, the Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “Lender”), may have economic interests that conflict with those of the Borrower. The Borrower acknowledges and agrees:
(a) nothing in the Credit Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Lender and the Borrower, its stockholders or its affiliates;
(b) the transactions contemplated by the Credit Documents are arm’s-length commercial transactions between the Lender, on the one hand, and the Borrower, on the other;
(c) in connection therewith and with the process leading to such transaction the Lender is acting solely as a principal and not the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other Person;
(d) the Lender has not assumed an advisory or fiduciary responsibility in favor of the Borrower with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Lender or any of its affiliates has advised or is currently advising the Borrower on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Credit Documents;
(e) the Borrower has consulted its own legal and financial advisors to the extent it deemed appropriate;
(f) the Borrower is responsible for making its own independent judgment with respect to such transactions and the process leading thereto; and
72
(g) the Borrower will not claim that the Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Borrower, in connection with such transaction or the process leading thereto.
9.23 No Third Parties Benefit. This Agreement is made and entered into for the sole protection and legal benefit of the Borrower, the Lender, the Agent and each other Secured Party, and their permitted successors and assigns, and no other Person will be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Credit Documents. Neither the Agent nor the Lender will have any obligation to any Person not a party to this Agreement or the other Credit Documents.
9.24 PATRIOT Act. The Lender and the Agent (for itself and not on behalf of the Lender) hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender or the Agent, as applicable, to identify the Borrower in accordance with the PATRIOT Act.
[Remainder of Page Intentionally Left Blank]
73
| BORROWER: | ||
| Subsidiary Holdings II, LLC, as Borrower | ||
| By: | /s/ Gregory Pinkus | |
| Name: Gregory Pinkus | ||
| Title: Chief Financial Officer | ||
74
| ADMINISTRATIVE AGENT | ||
| ALTER DOMUS (US) LLC, as Administrative Agent and Collateral Agent | ||
| By: | /s/ Pinju Chiu | |
| Name: Pinju Chiu | ||
| Title: Associate Counsel | ||
75
| LENDER | ||
| STRATEGIC YIELDCO LLC, as Lender | ||
| By: | /s/ Colin Ramsey | |
| Name: Colin Ramsey | ||
| Title: Vice President, Regions Bank, | ||
| as Custodian & Adm. | ||
76
APPENDIX B TO TERM LOAN AGREEMENT
Notice Addresses
(i) if to the Borrower:
Subsidiary Holdings II, LLC
c/o Terra REIT Advisors, LLC
205 West 28th Street, 12th Floor
New York, NY 10001
Attention: Gregory Pinkus
Email: [email protected]
with a copy to:
Terra REIT Advisors, LLC
205 West 28th Street, 12th Floor
New York, NY 10001
Attn: Michael Fishbein and Donald Stern
E-mails:
[email protected]
[email protected]
(ii) if to the Administrative Agent or the Collateral Agent:
Alter Domus (US) LLC
225 W. Washington Street, 9th Floor
Chicago, IL 60606
Attn:, Legal Department – Agency, Matthew Trybula and Samuel Buhler
Email: [email protected]; matthew.trybula and [email protected]
with a copy to (which shall not constitute notice):
Holland & Knight LLP
150 N. Riverside Plaza, Suite 2700
Chicago, IL 60606
Attention: Joshua M. Spencer
E-mail: [email protected] and [email protected]
and with a copy (which shall not constitute notice) to:
Sidley Austin LLP
787 7th Ave,
New York, New York 10019
Attention: Steven Rutkovsky ([email protected])
77
Schedule 5.13
Post-Closing Matters
1. The Borrower shall use commercially reasonable efforts to, on or prior to the tenth (10th) Business Day following the Closing Date, provide the Collateral Agent with evidence of the opening of the Collateral Account; provided that the Collateral Account shall in any case be opened prior to the receipt by the Borrower of Realization Proceeds and/or the making of any capital call by the Funds.
2. On or prior to the fifth (5th) Business Day following the date on which the Collateral Account is opened, the Collateral Agent will have received the fully executed direction letter, in form and substance satisfactory to the Collateral Agent (acting on the instructions of the Lender) duly executed by the Funds confirming that all dividends and other distributions payable by the Funds with respect to the Portfolio Investment will be paid directly by the Funds to a Collateral Account.
3. On or prior to the forty-fifth (45th) day following the date on which the Collateral Account is opened, the Collateral Agent will have received the fully executed Account Control Agreement, in form an substance satisfactory to the Collateral Agent (acting on the instructions of the Lender).
78